About ten developers are expected to go ahead with 20MW to 50MW solar photovoltaic projects under Egypt’s feed-in tariff, at the Benban, Zafarana and Gouna sites.

They include regional developers such as Saudi Arabia’s FAS Energy, Alfanar, local Orascom Telecom & Media Technology (OTMT) and Wadi Degla Holding Company.

These developers had already arranged project finance with local banks such as Commercial International Bank, despite the higher cost of finance.

International developers including Norway’s Scatec Solar have arranged alternative sources of finance. The European Investment Bank had offered to partially finance five 50MW Scatec projects, but is thought to have pulled out.

MEED was unable to attain comment from Scatec, and it is unclear how many of the five projects they can progress with.

Development banks led by the IFC were forced to pull out of financing around 30 solar feed-in tariff projects. Negotiations over international arbitration, which is standard practice globally, broke down in June.

This has left developers reliant on local lenders who will accept local arbitration. However, the cost of borrowing in Egypt is significantly higher, after the Central Bank raised its overnight deposit rate to 11.75 per cent in June.

Developers had to submit full financing plans with letters from lenders to the Egyptian authorities on 30 June. These developers will then pay the final installments of infrastructure cost-sharing agreements and sign power purchase agreements.

Neither the New and Renewable Energy Authority (NREA) nor the Egyptian Electricity Holding Company (EEHC) was able to comment at this time.

The projects MEED has identified as able to go ahead represent just a small proportion of the 2000MW target for 20MW to 50MW solar projects under the scheme. Other developers will be moved to the second round of solar projects, which is expected to have different terms and a lower tariff.

Wind power developers and solar developers at the Minya site are at an earlier stage, and were not asked to submit financing plans.