Italian firm in final talks for Egypt wind scheme

06 June 2016

Energy company in negotiations with Cairo to develop project under different model

Italian energy firm Italgen is in negotiations with Egypt’s utility providers to develop 320MW of wind projects.

Italgen had been involved in talks with Egypt Electricity Transmission Company (EETC) and the New & Renewable Energy Authority (Nrea) to develop 320MW of wind capacity under the merchant independent power project (IPP) model, which was first introduced in Egypt in 2012.

However, the Italian group is currently in negotiations with Egypt’s electricity bodies to develop the scheme under a similar model used for the country’s competitive bidding build, own, operate (BOO) model. An agreement is expected to be reached by the middle of June, according to a source close to the project.

The difference between the two models in Egypt is that for the merchant IPP model, the developer needs to reach an agreement with end users for buying electricity, whereas with the competitive bidding model, the government will agree a tariff price with the developer to offtake the power.

MEED recently reported that a consortium led by UK/French developer Engie was in advanced negotiations for the contract to develop a 250MW wind farm in Egypt’s Gulf of Suez under the competitive bidding BOO model. The team submitted the low bid in April 2015, at $0.041 a kilowatt hour (kWh).

Egypt is planning for wind power to play a significant part in its aim for renewable energy to contribute to 20 per cent of the country’s power generation mix by 2022.

Nrea is planning for wind to provide 7,110MW of the country’s power generation by 2022, with solar planned to provide 2,870MW and hydropower scheduled to produce the remaining 2,800MW of renewable energy planned.

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