Private sector construction company Hassam Allam Holding will start constructing its first solar energy project, expected to cost $80m, in the first quarter of 2016, the company’s deputy business development director Ahmed Kafouri told the Daily News Egypt on Tuesday.
Hassan Allam Holding announced that they have signed an agreement with the New and Renewable Energy Authority (NREA) to develop a 50 MW solar power plant in Aswan, under the government’s new feed-in tariff programme.
The company said, in a statement, that the signing of the agreement will allow the company to finance, build, own and operate the plant. The statement noted that this represents a new milestone for the company in the field of power development.
The group’s construction arm, Hassan Allam Construction, will be responsible for the engineering, procurement and construction (EPC) role of the project, which is expected to end in 2015.
“The ambitious plan that NREA has been implementing to address the increasing energy challenges the country faces today is commendable. We are determined to support such programmes both as an investor in the power sector and as a contractor,” said CEO Hassan Allam in the statement.
With Egypt aiming to produce 20% of its energy using new and renewable sources by 2020, there has been much activity in the solar energy sector. Last September, former minister of electricity Mohamed Shaker announced the pricing for electricity generated by new and renewable energy sources for households and private sector companies, through a system that is known as the feed-in tariff.
The feed-in tariff’s purpose is to encourage private investment in the field, due to limited conventional fuel resources, according to Shaker. The energy tariff has been divided into five categories, so that the price per kilowatt for households is EGP 0.84, but for 200 kilowatts of usage, the price rises to EGP 0.911.
In the same regard, Orascom Telecom Company, Media and Technology is currently awaiting the Power Purchase Agreement (PPA) to proceed with the feed-in tariff electricity project. The company was among the first companies to announce feed-in tariff projects, and the land was provided during the Economic Summit that was held in Sharm El-Sheikh in March.
Also, Bahrain-headquartered Terra Sola Group for solar power generation proposed in February to invest $3.5bn in Egypt, in a project aiming to develop solar photovoltaic technology. The project is expected to generate annual revenues of $760m, in addition to creating 20,000 job opportunities in the first year of operation.
Egypt has recently been seeking to expand the use of solar energy in many different sectors, such as irrigation land reclamation, and industries, opening many investment opportunities in this sector in order to decrease the consumption of electrical and fuel energy.
In that regard, solar energy units have been installed in many governorates’ administrative offices, such as Cairo, Beheira, and North Sinai. As for the governorate of South Sinai, the Salam Road, which is 8km long, and four main streets in Sharm El-Sheikh are lit using solar energy, according to Minister of Local Development Adel Labib.