Egypt will allow prequalified companies to participate in more than one consortium for the feed-in tariff renewables scheme, contrary to statements at the World Future Energy Summit (WFES) in Abu Dhabi on 20 January,
Spokespeople from the New & Renewable Energy Authority (NREA) and the Egyptian Electricity Transmission Company (EETC) had stated on 20 January that due to extremely high interest in solar PV projects from 20MW to 50MW, companies would have to withdraw from all but one consortium, even if they were not lead developers. The affected consortiums would not have been able to carry out a project under the first round of the programme.
Since then, the rules have been clarified and the statement appears to have been a misunderstanding.
The NREA has confirmed that land can be awarded to consortia with common participants, stated UK law firm Eversheds in a notice to developers. The exception is if the lead partner is the same in more than one consortia and those consortia are each awarded land.
Some companies have joined several consortiums to take advantage of attractive feed-in tariffs, after receiving the go-ahead from the Electricity & Renewable Energy Ministry. German renewables promoter Dii-Eumena is involved in five solar PV consortiums, while the US SunEdison also prequalified in more than one solar PV group. Neither company could be reached for comment.
We understand from NREA briefings held last week at WFES that, although developers are free to take equity stakes in more than one project, they can only perform the role of lead developer in connection with one project, says Richard Keenan, a partner at US law firm Chadbourne & Parke. Developers are now starting to receive letters of eligibility. There is mounting pressure on solar developers to position themselves at the top of the queue for land allocation and project award.
Developers that prequalified for both wind and solar schemes can carry out projects in both sectors.
The NREA will also allow minor alterations in the consortiums, as long as the prequalified bidder remains the lead developer.
In the next few weeks, developers caught by surprise by the speed of the programme may attempt to negotiate tie-ins with prequalified consortiums, says Marc Norman, a project finance lawyer at Chadbourne & Parke. They will be looking for developers with weaker technical references, or who may be struggling with the fairly hefty down-payment requirement.
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