Spain’s Acciona Energia and Swicorp of Saudi Arabia will build three solar photovoltaic (PV) plants in Egypt to help power around 150,000 homes.
The companies will construct three 50 megawatt plants, costing around US$180 million, in Upper Egypt’s Benban area.
“We are very pleased to increase our presence in an area with great potential in the long run for the renewable energy sector as is North Africa,” said Acciona’s chief executive Rafael Mateo.
Egypt’s government has been trying to attract more renewable energy projects to Benban, considering it an integral role in the country’s overall targets. It is expected to include 41 privately-owned plants to generate 1.8 gigawatts of power next year, placing it as one of the largest such complexes in the world.
While this project will be financed through the World Bank’s lending arm, International Finance Corporation, and the Asian Infrastructure Investment Bank, Egypt has so far struggled to get its renewables projects off the ground.
The country initially targeted 20 per cent of its total power generation to derive from renewables by 2020, but that was delayed to 2022. The government implemented a feed-in tariff (FIT) scheme, which provides an incentive to attract investors, to jump start 4GW of solar and wind energy.
Yet round one of the FIT programme had hiccups - such as a 15 per cent of the payment converted at a fixed rate of 7.15 Egyptian pounds to the dollar while the remaining 85 per cent would be paid at the prevailing market rate. However, authorities tweaked this in the subsequent round to include 30 per cent of payments made at 8.88 pounds to the dollar and 70 per cent at the market rate on the due date.
These latest plants are expected to start construction in December and come online 12 months later.
“We believe in the potential of the region and Egypt and look forward to executing further projects in our pipeline under our successful alliance with Acciona” said Rabeaa Fattal, the executive director of Swicorp.