Egypt to open bids for private wind farm

Existing wind power contributes less than 1 per cent to the country's energy mix

The World Bank will lend Cairo $220m to develop the infrastructure needed to connect wind farms to Egypt's national grid.

Egypt will seek private-sector investors to develop and own a 1,000 megawatt wind farm in the Gulf of Suez, in the country's biggest step to meet ambitious government targets for renewable energy. The project will be tendered within a few days, said Hassan Younes, the Egyptian minister of electricity.

A wind power development of that size would match the projected capacity of the London Array, the flagship UK offshore wind project being built in the Thames estuary. It would significantly advance Egypt's plan to install 7,200mw of new wind capacity by 2020. Egypt meets more than 86 per cent of its electricity demand from thermal plants burning mostly natural gas. Another 12 per cent is hydro-electricity from the Aswan High Dam in the far south of the country.

Existing wind farms contribute less than 1 per cent to Egypt's energy mix but the government hopes to expand that to 12 per cent by 2020. Solar projects are also planned. Overall, the country is seeking to reduce its greenhouse gas emissions by 30 per cent and to generate 20 per cent of its power from renewable sources, excluding hydroelectricity, by 2020. The targets are broadly comparable with those declared by European countries such as Germany and the UK.

This month the World Bank agreed to lend Cairo US$220 million (Dh808m) to develop infrastructure connecting wind farms to the national grid, and to support the development of the previously announced 250mw Gabel el Zait wind project. The loan was the first to a project in the MENA region supported by the UN's Clean Technology Fund, which will provide $150m of the financing. "One of the outcomes of this project is to reduce [greenhouse gas] emissions through facilitating the development of clean energy resources which will result in displacing thermal generation," said Chandrasekar Govindarajalu, a World Bank official.

"Furthermore, the project has several elements that make a strong case for replicability. The Egyptian experience, being the most extensive in the region, will be applicable for many of the other MENA countries." Egypt has one of the region's best wind resources along the Gulf of Suez. Last year, the government allocated 630,000 hectares of land in the area for wind farms. Last November, the government shortlisted 10 companies to bid on the Gabel el Zait project, which will be Egypt's first private-sector wind farm.

The electricity ministry is expected to hold a second bidding round to select the developer by the end of this year. In February, an Egyptian official said the electricity ministry was planning a further 200mw wind project with Masdar, the Abu Dhabi Government's clean energy company. [e-mail]