A consortium of UK/French Engie, Japan’s Toyota Tsusho and the local Orascom Construction is still in negotiations for a contract to develop a 250MW wind farm in Egypt’s Gulf of Suez.

Mohamed el-Sobki, executive chairman of Egypt’s New & Renewable Energy Authority (NREA), has told MEED talks are ongoing with the team, but that the deal is expected to be finalised and signed “soon”.

The Engie-led consortium submitted the low bid, at $0.041 a kilowatt hour (kWh), to develop the build-own-operate (BOO) scheme in April 2015.

The Gulf of Suez BOO tariff prices were significantly lower than the average levelised cost of electricity (LCOE) for onshore wind projects, 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. This makes 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 UK’s Actis.

Egypt is planning for wind power to provide more than 7,000MW of electricity by 2022 as part of its ambitious renewable energy targets. The majority of the wind capacity will be developed through a combination of engineering, procurement and construction-plus financing and independent power projects (IPPs).

This is in addition to the 2,000MW of wind power to be developed under the feed-in tariff scheme. The wind farms will be split between the Gulf of Suez, Zafarana and Gabal el-Zeit.