Egypt to seek bids for solar and wind-power projects

Egypt will begin accepting bids for 500 megawatts of renewable energy projects this month.

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Egypt will begin accepting bids for 500 megawatts of renewable energy projects this month.

The government yesterday said it would open the tenders for the three projects – two solar and one wind – as it tries to achieve its target of using renewable energy for 20 per cent of its energy needs in five years’ time.

One investor involved in the first round of solar photovoltaic (PV) tenders said the first phase of the government’s feed-in tariff programme, a subsidy scheme, had yet to be concluded, and none of the 1,800MW PV projects the government had awarded had reached financial close. Financial close occurs when all the project and financing agreements have been signed and all the contractual conditions have been met.

“The timing for these new tenders is premature because the serious companies are already involved and want to get across the finish line before they take a bigger chunk out of the market,” said the investor, adding that his company would not be interested until its existing projects have closed financially.

Egypt has to date awarded 1,800MW of PV projects that drew attention from interested companies. The country has also put 1,200MW of wind energy projects up for tender, but they are off to a slower start.

Eversheds, a British law firm and clean energy consultancy, has released a report that details the latest tenders: a 250MW wind project, a 200MW PV project, and a 50MW concentrated solar power (CSP) plant. According to Eversheds, the government requires the firms participating in the projects to have relatively high levels of clean energy experience.

To qualify, a company must have completed three projects, each with a minimum capacity of 50MW for the wind and PV tenders, and 30MW for CSP. Only a handful of companies have such levels of experience.

“If the reports are true, I think it will be a relatively small group of top international developers, due to the high criteria the Egyptian government is requiring,” said Cornelius Matthes, managing director for the Middle East and North Africa at Building Energy, an Italian firm.

One investor said the “feedback from the market will be very lukewarm” because of the projects’ financial complications and Egypt’s high requirements.

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