The Egyptian Electricity Holding Company (EEHC) is moving forward with negotiations for a major coal-fired independent power project (IPP), with the power purchase agreement (PPA) due to be signed in next few weeks.

According to sources close to the project, EEHC and the UAE’s Al-Nowais Investments, through its power subsidiary AMEA Power, are close to finalising and signing the power purchase agreement (PPA) for a coal-fired IPP at Ayoun Moussa. The project, which is planned to have a first phase capacity of 2,640MW, has been under negotiation since 2015, when Al-Nowais signed initial agreements for the projects.

MEED reported in February 2016 that preliminary studies had been completed and that Al-Nowais was negotiating with EEHC and seeking finance. Speaking to MEED at the time, Fouad Mohamed Mansour said that the PPA would “be used as a template for the other private projects.”

The project was one of three bilaterally-negotiated coal-fired IPP projects for which initial agreements were signed in 2015. Progress with the projects stalled due to a number of issues, from concerns over contract provisions to the fall in the value of the Egyptian pound following the flotation of the currency in late 2016. The successful implementation of a 2015 fast-track programme, followed by award and execution of 14.4GW of capacity under a megadeal with Germany’s Siemens, reduced pressure on Egypt’s utilities provider to urgently proceed with the projects.

Egypt also signed initial agreements in 2015, at the Egypt Economic Development Conference (EEHC), for two major coal power plants to be developed under engineering, procurement and construction (EPC) plus finance contracts. Cairo had set a target of developing 12.5GW of coal-fired capacity by 2022, but due to delays with planned projects this is likely to be moved.