Egypt’s Electricity and Renewable Energy Ministry and the Egyptian Electricity Holding Company (EEHC) are inviting expressions of interest for photovoltaic (PV) solar projects up to 50MW, rooftop solar projects up to 500kW and wind projects between 20MW and 50MW before 26 November.

The ministry intends to award 4,300MW of direct proposal contracts by late 2016. This comprises 2,000MW of wind projects, 2,000MW of solar PV projects and 300MW of rooftop solar PV projects. This implies the award of at least 800 large contracts and 600 rooftop contracts, which have attracted considerable interest from developers and investors.

Prequalified companies are scheduled to be announced by the end of the December.

The independent power projects (IPPs) will connect to the grid under the feed-in tariff established in September, with 25-year contracts for solar projects and 20-year-contracts for wind projects.

Solar PV projects:

Feed-in tariff Tariff (kWh)
Homes 84.8 piastres
Less than 200KW 90.1 piastres
200KW-500KW 97.3 piastres
500KW-20MW $0.136
20MW-50MW $0.1434

Wind projects:

Hours of operation Feed-in tariff in the first five years of contract ($) Feed-in tariff in the following 15 years of contract ($)
2,500

 

 

0.1148

0.1148
2,600 0.1056
2,700 0.0971
2,800 0.0893
2,900 0.0819
3,000 0.0751
3,100

 

 

 

0.0957

0.0893
3,200 0.0833
3,300 0.0776
3,400 0.0723
3,500 0.0673
3,600 0.0626
3,700 0.0581
3,800 0.0539
3,900 0.0498
4,000 0.046

Egypt is following Jordan’s successful direct proposal model on a more ambitious scale. Jordan set a precedent in 2014, signing 15 agreement totaling 170MW, and is now accepting proposals for the delayed second round of its programme. However, the third round was cancelled due to lack of institutional and grid capacity, an issue Egypt could also face.

“Egypt is the new Saudi Arabia for renewables,” says Vahid Fotuhi, president of the Middle East Solar Industry Association. “The regulations, government support and demand are all coming together.”

The successful award of these contracts would represent considerable progress towards its target of 20 per cent or 7,200MW renewables capacity in 2020, although this is unlikely to be met on time.

Egypt has significant potential for wind and solar, but only had 687MW of solar and wind capacity installed in 2012. It has completed only one renewable energy project since then, phase one of Gabal el-Zeit Wind Farm, which has a capacity of 200MW. Several other New & Renewable Energy Authority (NREA) projects are still in the tendering process, including the 250MW Gulf of Suez Wind Farm and the 200MW Kom Ombo PV Plant.

The delays are partly due to the political instability since 2011. However, the new government is keen to prove it is serious about upgrading Egypt’s inadequate infrastructure. It is planning a nuclear power plant and the redevelopment of the Suez Canal.

Egypt, which has considerable gas reserves, could become a net gas importer by 2020 due to consistent rises in domestic demand. Peak load for electricity almost doubled between 2000 and 2010 and is expected to continue growing at rapid pace.