Power Purchase Agreement in Egypt

The government has also put in place several incentives for private renewable energy developers and commercial producers. Incentives include, among others, the announcement of feed-in tariffs, the guarantee of access to the grid, the possibility of long-term power purchase agreements, the prioritization of handling, the allocation of space required for projects at a reduced price and the net metering system. The Electricity Act created two electricity markets. The first is the competitive market, where eligible consumers are free to choose their electricity suppliers on the basis of direct bilateral agreements and negotiated electricity prices. The second is the regulated market, where non-eligible consumers pay a regulated tariff and buy electricity from distribution companies supplied by a public trader. Egypt aims to produce 22 percent of its electricity from renewables by next year, but was far behind at the end of last year, according to the International Renewable Energy Agency, which estimates that at the time, only 10.1 percent of its production came from clean energy sources. Saudi energy company ACWA Power announced today that it has signed a 25-year power purchase agreement with Egyptian Electricity Transmission Company, saying development is on track to begin production before October next year. According to the Construction Act, a building permit must be obtained from the competent municipality in which the plant will be located. This building permit is required before the start of construction of the facility such as the surrounding fence or other buildings. In September 2015, the Ministry of Electricity and Renewable Energy published specific rules for public procurement. The regulation applies to all NREA procurement activities such as purchase and contract transactions, services and delivery work, including maintenance and installation, consulting and technical work, and real estate licensing and leasing. The regulations allow NREA to sell the electricity produced by its stations either to EETC at prices set by EgyptERA and approved by Cabinet, or directly to end-users to meet their needs. The EETC will monopolize the transmission and operation of electricity nationwide and will be the TSO of the electricity grid in Egypt.

The mission of the EETC is to ensure the long-term capacity of the transmission system to meet electricity demand and maintain the system safe, reliable and efficient. For example, it is allowed: In traditional PPAs, the contract is always between the electricity producer and a utility company or government agency as the buyer. The plants, which are expected to be commissioned in Q4 2021 for solar and Q3 2023 for wind, will be able to power around 830,000 homes, with an expected production of nearly 2.9 GWh per year. The project confirms AMEA Power`s commitment to support the country`s firm goal of increasing the contribution of renewable energy by 42% to its energy mix by 2035. Rajit Nanda, ACWA`s director of portfolio management and acting chief investment officer, said the plant would produce clean electricity at a price “the lowest on the African continent for a project that will soon reach financial close and begin construction.”pv magazine reported that in October 2019, ACWA won the tender with a final electricity price offer of $0.02752/kWh. The power purchase and grid connection agreements, as well as the usufruct agreement that guarantees the use of the land for the project, were signed by government agencies such as the Egyptian Electricity Transmission Company and the New and Renewable Energy Authority. Saudi Arabia`s Acwa Power has signed the Power Purchase Agreement (PPA) for the 200 MW Kom Ombo Solar Photovoltaic (PV) project in Egypt. The Saudi developer signed the PPA on September 30. October in Cairo with the Egypt Electricity Transmission Company (EETC). Acwa Power was selected as the preferred bidder in April this year after submitting the lowest rate proposals of 2,752 $cents kilowatt hours ($c/kWh) and 2.7499 $c/kWh in August 2018.

In September, EETC commissioned three companies to provide advice on the 200 MW solar IPP. The American and Indian law firm Synergy Consulting has been appointed financial advisor, the American law firm Baker Mckenzie legal advisor and the American law firm Sargent & Lundy technical advisor. Egypt has set a target of renewable energy contributing 20% and 35% of total energy production, respectively, by 2022 or 2035. SolarizEgypt said the 25-year deal was awarded by Arabian Cement Company (ACC) — Egypt`s third-largest cement producer — to Ain Sokhna-Suez. The contract is for a 6 MW solar power plant that is expected to generate about 14 GWh per year to meet 4% of the electricity needs of an ACC-owned power plant. Egypt`s Minister of Electricity and Renewable Energy, Mohamed Shaker El Markabi, took the opportunity to hint at an increase in his country`s clean energy ambitions. In the ACWA press release, he said: “In line with Egypt`s Integrated Sustainable Energy Strategy, our goal is to produce 42% of Egypt`s electricity from renewable sources by 2035. Necessary studies are currently being conducted to increase this percentage, with a focus on maximizing the use of renewable energy in many areas, including water desalination and green hydrogen production. Abyodos Solar Power Company (ASPC), a wholly owned company of AMEA Power, will build, own and operate the 200 MW solar project in the Kom Ombo area of Aswan under the 25-year take-off or payment agreement.

Amunet Wind Power Company (AWPC), also wholly owned by AMEA Power, will build, own and operate the 500 MW wind project in the Ras Ghareb area under the 20-year take-over or payment agreement. The 25-year deal concerns a 6 MW solar power plant that will cover up to 4 percent of the electricity needs of an Arabian Cement Company plant in Egypt`s Suez governorate. The project is financed by local bank QNB AlAhli as part of the EBRD`s Green Economy Programme. Padmanathan added: “ACWA Power works with its partners to deploy the most advanced technologies and leverage strong investment opportunities to further reduce the cost of producing renewable energy, which is one of the main pillars in promoting a country`s sustainable economic development. As a Saudi company, we are particularly proud of this partnership with our brothers and neighbors, which will accelerate the use of clean energy and contribute to the social and economic development of the Arab Republic of Egypt. This investment will not only generate 200 megawatts of solar energy, but will also stimulate job creation by promoting a green economy and fostering a vibrant society. Egyptian solar company SolarizEgypt said it has secured a long-term PPA for a solar power project it will build in Suez governorate, a deal that is the first private power purchase agreement for utility solar power awarded in the country. Under that system, independent producers of renewable energy (`PIP`) may conclude bilateral purchasing agreements with authorised consumers. .