Saudi Arabian MTMM Consortium has signed a memorandum of understanding (MoU) with the Egyptian government to invest in up to 4,000MW of renewables projects.

If plans move ahead, the group aims to develop 2,000MW of solar projects and 2,000MW of wind projects.

The schemes are at the feasibility study stage.

M. Sharbatly will provide equity in the consortium. The Sharbatly family own local developer City Stars Properties.

MTMM is in direct negotiations with European and Chinese developers to carry out the projects.

A decision has not been made on whether the contracts will be awarded on an engineering, procurement and construction (EPC) or a build, own, operate (BOO) basis.

“We are leaning towards BOO,” Mohamed Turki, Chairman/CEO of Saudi/UK MTMM Engineering Consultancy, tells MEED.

The projects will be about 400MW to 500MW each, depending on site studies, grid capacity and available connections.

The Egyptian government has identified eight possible sites. MTMM Engineering Consultancy is working with Cairo to carry out site evaluations to produce detailed data on solar and wind resources.

The consortium is in negotiations with the government over the power purchase agreement (PPA) and to secure sovereign guarantees for the project.

“We are negotiating a bankable PPA with the Egyptian government and we hope to reach a financial close by the end of the year,” says Turki. “We have made initial approaches to banks and insurance companies and the responses have been positive.”

Egypt already has nearly 5,000MW of renewables capacity in the pipeline, with 4,300MW as part of the feed-in tariff scheme, for which the PPA is also being refined.

The New & Renewable Energy Authority stated earlier in the year that the feed-in tariff scheme had a 4,000MW cap due to the capacity of the Egyptian grid to absorb renewables projects.

The government has committed to invest £E4bn ($549m) in 2015 to improve grid capacity and strengthen the network. Other renewables projects have been tendered as EPC and BOT contracts.

Egypt needs to add 54GW of additional power capacity in the next seven years to meet forecast demand. The Electricity & Energy Ministry estimates that $70bn of investment will be required in the power sector up until 2022, with $25bn of this to come from the private sector.