Saudi Arabian company Alfanar will sign a power purchase agreement with the Egyptian Electricity Transmission Company (EETC) next week.
Mohamed Abdel Karim, director of Alfanar’s renewable energy projects in Egypt, said that the company on Wednesday paid the third instalment of the cost-sharing agreement after an increase of its value by about 35%.
He added that the company managed to complete the financial closure of the new solar power plant with a capacity of 50MW and investments of up to EGP 100m. This project will be financed by the European Bank for Reconstruction and Development (EBRD) and the Islamic Development Bank (IDB).
Alfanar has allocated $200m for the establishment of two new and renewable energy projects in Egypt, with a total capacity of 100MW and operating according to the feed-in tariff.
The second phase of the feed-in tariff was launched on 28 October 2016, at a price scheme of about 102.3 piasters per kWh for houses. The capacities of less than 200 kWh will be sold at 108 piasters for houses, and 102 piasters for commercial activities. The capacities of less than 500 kWh will be sold at 108.58 piasters for commercial activities.
The solar power projects of capacities ranging from 500 kW to less than 20MW will be sold at 7.88 piasters per kWh, while the projects of capacities ranging from 20MW to 50MW will be sold at 8.40 piasters per kWh.
According to the second phase of the feed-in tariff programme, the investor is committed to achieving the financial closure of solar energy projects within a maximum one year, and one year and a half for wind power projects, starting from 28 October 2016. The investor also has to submit a credit letter from foreign financing institutions within a maximum of six months for solar energy projects and one year for wind power projects.
The second phase of the project stipulated that companies secure 70% of finance from foreign banks and 30% from local banks.