The Egyptian Electricity Transmission Company (EETC) has signed a contract with an international consortium to develop a 500MW wind independent power project (IPP) in the Ras Ghareb area of the Gulf of Suez, Egypt.

After signing the initial agreements, the consortium, containing the local Orascom Construction, France’s Engie, Japan’s Toyota Tsusho Corporation and Erus Energy Holdings Corporation, will now begin working on contract details and are hoping to reach financial close by the third quarter of 2019.

The project will be developed under a build-own-operate (BOO) model. The EETC is the offtaker and the New & Renewable Energy Authority (Nrea) is the land owner.

The project will supplement the existing 250MW wind project that the consortium is currently developing in Ras Ghareb, and is expected to be commissioned in the second half of 2019. MEED reported in December that the 250MW wind BOO project had reached financial close, after a protracted bid evaluation and negotiations stage.

The consortium submitted the lowest tariff price of $0.041 a kilowatt hour (kWh) for the wind farm in April 2015 through a competitive bidding process, one of the lowest tariffs achieved in the world for a utility-scale wind power project. The bid was 9.3 per cent lower than the $0.045 a kWh tariff submitted by the second lowest bidder, a consortium of the UK’s Actis and Mainstream Renewable Power.

Egypt has set targets for renewable energy to contribute 20 and 35 per cent of total energy produced by 2022 and 2035 respectively.