Consortium aims for financial close in early 2016
They are working with the Japan Bank for International Cooperation (JBIC) to put together a consortium of commercial banks to finance the project.
JBIC may also take a major tranche of debt, depending on the level of Japanese involvement.
The consortium expects to reach a financial close in early 2016.
The Engie consortium submitted the lowest bid, at $0.041 a kilowatt hour (kWh), to develop the build-own-operate (BOO) project in April.
The tariff will be paid in dollars, meaning the developers will not face currency conversion problems in financing the project. Developers and financiers are raising convertability concerns on the 4300MW renewables feed-in tariff scheme, to be paid in local currency.
The Gulf of Suez BOO tariff prices were significantly lower than the average levelised cost of electricity (LCOE) for onshore wind, which ranged between $0.06 a kWh in China and $0.09 a kWh in Africa in 2014, according to the UAE-based International Renewable Energy Agency, making it highly competitive with fossil fuel generation.
The low tariff prices submitted in Egypt were due to a combination of factors, including a site location with some of the best wind conditions in the world, and low global interest rates at the time of bidding.
The second lowest bid, of $0.045 a kWh, was submitted by a consortium of Irish Mainstream Renewable Power and the UKs Actis.
MEED reported that both consortiums were in negotiations with the New Renewable Energy Authority (NREA) in September.
In November, an Actis/Mainstream joint venture, Lekela Power, signed a memorandum of understanding with the Egyptian Electricity Transmission Company for a separate 250MW wind project in the Gulf of Suez. The $350m project, negotiated through a bilateral agreement, will also be developed on a BOO basis.
With Egypts New & Renewable Energy Authority (NREA), the Ministry of Electricity & Renewable Energy is planning more than 1,300MW of wind power in the Gulf of Suez, predominantly on an engineering, procurement and construction (EPC) basis.
This is in addition to the 2,000MW of wind power to be developed under the feed-in tariff scheme. Wind farms will be split between the Gulf of Suez, Zafarana and the Gabal el-Zeit.