Benban, a village in Aswan, has been brought back to life with a dozens of experts and investors on the location of the solar energy plants to launch the largest gathering for electricity production from solar power on the feed-in tariff system, with 1900 MW capacities and investments worth $2.5bn.
The capacities planned to be added to the national electricity grid from these projects are estimated at 90% of the produced energy from the Aswan High Dam. In addition, 33 local and Arab companies will be implementing the projects, in addition to more than 30 other companies handling the service and construction works during implementation period.
Daily News Egypt had a tour on the locations of the projects in Benban, Aswan. At the beginning of the road leading to the location, there were no clear signs to explain to investors or visitors that there are underway projects, except for one sign for XD Egemac company explaining that four solar energy transmitters are under construction.
Large areas in the desert will witness the establishment of the projects but signs were absent, except for a small sign with the name of the land owner on it. Investors only know where to find their lands through Hussein El Prince, one of the guiding residents in Benban, and one responsible for solar energy projects.
Hussein El Prince is the investors’ personal guide
Hussein El Prince said that he knows all the details about the lands and the roads leading to them. “I have a number specified for each land, and I know the companies’ names. When investors visit, I take them to their lands easily,” El Prince said.
El Prince explained that the projects have brought back hope to the residents of Benban, especially that they suffer from severe poverty.
He said that Benban’s residents are working in camels trade and agriculture. The New and Renewable Energy Authority (NREA) chose the locations of the projects to be on Benban’s lands and told the residents that they will be national projects and will provide them with jobs better than their current jobs; however, they never received compensations for their lands, but they were promised to be a top priority in terms of jobs throughout the periods of the projects.
Daily News Egypt watched the construction work take place by Infinity Solar in preparation for the implementation of a solar energy plant with a 50 MW capacity. It is considered the only company among other investors present on location.
Sohaib El Abady, an engineer in Conicon and manager of the location of Infinity Solar, said that his company has contracted with Infinity to undertake all the construction works and delivery of the project. He explained that 20,000 pieces of steel parts will carry the solar cells to produce 50 MW. The number of workers and engineers in the project are nearly 30, and they are Spanish and Roman.
He said that Conicon has implemented several projects across the world with 2,000 MW capacities and has several branches in many countries. It has also opened its most recent branch in Egypt two month ago. The company is willing to cooperate with all companies and investors.
He added that the largest challenge facing the company in Egypt is the high temperature. According to Infinity, launching all construction works will be completed by November.
After leaving the location of the projects, Daily News Egypt saw a small security booth with three young men from Benban, and they emphasised that they were hired by the company to secure the location. They said they were unemployed, but, at the moment, they have fixed jobs with good salaries.
Elf Energy makes extensive preparations on location, FAS temporarily out of service
Elf Energy is carrying out extensive preparations on location to implement the required works. The project was moved from Zaafarana to Benban after a large number of companies withdrew.
Daily News Egypt saw a Chinese delegation from GEDI on the location of Elf Energy after agreeing to fund the project base on the famous system of EBC+F.
Elf, FAS, and Infinity are three companies the Egyptian government contracted with from which to purchase electricity during the first phase of the feed-in tariff programme, committed to the conditions and controls that require collecting 85% of the projects’ expenses from foreign banks and 15% from local banks, in addition to the arbitration of disputes in case they took place inside Egypt. The produced kw will be purchased for 14.32 cents.
Karim Gebrail, the manager of projects in Elf Energy, said that the presence of the representatives from GEDI is part of their visit to be familiar with the updates on the location in Benban, especially that the company will prepare feasibility studies after the location is moved from Zaafaran to Benban.
He explained that GEDI will start settlement works and levelling the ground next month.
None of FAS’ individuals were present; however, a sign noted that the land belongs to the company. El Prince stressed that officials from the company have not been present on the location for a long time.
Benban’s women cook for workers
The women of Benban cook for the workers in the projects of the solar energy in a restaurant inside the village located on an area of 65 metres with six women working in it, providing 250 workers with fresh meals on a daily basis, according to El Prince.
He stressed that, even though a small number of no more than 1% is working on the location, there is a great state of refreshment witnessed by the residents of the village.
“Benban is affiliated to Aswan’s Daraw district. It is located on the western bank of the Nile, opposite Edfu and Kom Ombo. It is distant by 35 km from Aswan and is famous for cultivation of Tomato which is exported to Europe,” he said.
He explained that residents of Benban were promised the establishment of Benban hospital in addition to water and sewage projects as part of the social responsibility of the companies working on the projects. It was agreed to establish a solar energy plant that produces electricity for Benban with 3 MW capacity.
Station ready to transmit solar energy mid September according to Nasr El dein
Egyptian engineering company and three companies work with XD Egemac to establish four transmission stations
Khaled Nasr El dein, an executive engineer in the Egyptian engineering company, said that the company is working to establish transmitters in Benban and is launching the main buildings and roads in cooperation with Egemac.
It is also handling the digging of concrete bases, road networks, iron fences, roofs, and bridges. Egemac has also contracted with three other companies to implement three transmitter companies.
He explained that the total cost will be estimated at EGP 15m.
We will not use employees from outside Aswan except on rare occasions, says Magdy Hegazy
Magdy Hegazy, the governor of Aswan, said that the solar energy projects will lead to great development in the economy. It was agreed with the implementing companies to give priority to the residents of Aswan in terms of employment, except for the rare specialties, such as inspections.
He added that he assigned a committee from the directorate of manpower in the governorate to review the employment in the project and inspect the staff in order to make sure they are from Aswan. The implementing companies carry out technical tests for the workers.
He explained that a scan is made on all the administrative and government buildings in order to invest their roofs to install the solar cells in coordination with the Ministry of Electricity to feed these buildings with the solar energy and transmit the surplus to the grid.
Hegazy explained that the governorate of Aswan has a supervisory role represented in checking the contract relationship between workers and companies in terms of health insurance and the availability of all the requirements of the Labour Law.
He added that developing work in the project can either be directly through the governorate or indirectly through investors’ companies, where there will be a supervisory member from the governorate to attend all the tests and assess the results to ensure transparency.
The solar energy projects are located on an area of 8843.3 feddans according to presidential decree no. 274 for year 2014. The investments are worth EGP 40bn.
The projects save Benban fom poverty, unemployment, corruption, say residents
The residents of Benban have announced their support to the establishment of the solar energy power plants and their willingness to meet the needs of the projects.
Ashraf Sanjaq, a resident of Benban, said that the village is suffering from worsening education and healthcare as well as sewage, and the residents were promised to have a class established in the secondary school in Benban dedicated to the studying of solar power. The residents were also offered equipment for the treatment of kidney failure by Infinity. They were also promised ambulances and other services by investors.
Mostafa Helal, one of the locals, said that the residents are willing to work in the projects during and after the construction period, especially that the conditions of the village are difficult.
“We have agreed with investors to meet all their requirements, and in case there was a tender for companies, the priority will go to the residents of Benban,” he added.
Seven companies represent Benban’s investors until the announcement of Solar Energy Investors Association in Benban
All solar energy companies have agreed to elect a committee to speak on the behalf of the investors in Benban until the announcement of the Solar Energy Investors Association there. Fifteen companies have made their requests, and only seven were chosen to represent investors.
The elected commission includes Yehia Shenqery from El Sewedy Electric, Hassan Amin from ACWA POWER, Mourad Fayed from Scatec, Mohamed Tawakol from El Tawakol, Hisham El Gamal from Infinity Solar, Faisal Eissa from Solar Shams, and Fatima Mohamed from FAS Energy.
The elected committee handles choosing the company consultants in Benban, which was won by Hassan Allam. It will handle putting forward the rules and organising all the requirements of the project, including sewage, water, greenery, infrastructure, and traffic.
The number of companies taking part in the feed-in tariff projects with both their phases is 33, which that aim to implement projects to produce solar energy with a capacity of 1,800 MW through solar power plants—with capacities ranging between 20 and 50 MW.
Work started on the second phase on 28 October 2016, and the price of KW/h was determined for projects of 500 KW to 20 MW to be 7.88 cents for each KW/h. For projects of capacities between 20 to 50 MW, prices are 8.40 cents for each KW/h.
According to the controls of the implementation of the second phase of the feed-in tariff of the renewable energy projects, investors are committed to financial closing of the project within a maximum time of a year for solar energy projects.
The controls also include the financing to be 70% from foreign sources and 30% from local ones.
According to the agreement of energy purchasing, in case a dispute took place, arbitration will take place in the Cairo Regional Center for International Commercial Arbitration, with the possibility of moving it to Paris.
El Motaheda Express and Injaz in anticipation to provide services for projects
The two companies provide all requirements in partnership with Benban’s residents
Amid the optimism of Benban’s residents, they are awaiting the two companies of Injaz and El Motaheda Express to handle the provision of the requirements for the establishing of the infrastructure in cooperation with the residents.
According to Ashraf Sanjaq, seven new water wells were established so far, producing 1,000 cubic metres of water per hour. An opening for irrigation was created to bring the Nile water with an 8-inch circumference. It produces 300 cubic metres of drinkable water.
Solar energy companies intensify their negotiations to carry out financial closing before October
Solar energy companies are intensifying their negotiations with the banking funding parties in order to carry out financial closure of their projects in the second phase of the feed-in tariff before the end of October, which is the date announced by the Ministry of Electricity.
The World Bank’s International Finance Corporation (IFC) plans to fund five new and renewable energy sources in the second phase of the feed-in tariff worth $71m for El Sobh Solar, SP Energy, Sun Rise, and Arena Solar.
Mohamed El Delaey, the project manager in the IRS, an affiliate of Desert Technologies, said that the company is seeking to carry out financial closure and sign an agreement to purchase energy with the Egyptian Electricity Transmission Company (EETC) next month.
He added that there are negotiations with the IFC to finance a solar energy plant with a capacity of 50 MW and investments worth $100m. There are also negotiations with several banks to participate in the financing by 15-20% of the total cost.
He explained that the IRS has renewed the documents of the project and presented it to banks because the models previously presented were based on the requirements of the first phase of the tariff, so they were required to be renewed.
Tenders will not be launched before completing implementation of the feed-in tariff, states the Electricity Minister
Mohamed Shaker, the Minister of Electricity and Renewable Energy, said that the government is willing to continue with the implementation of the feed-in tariff projects with both the first and second phases. Work was intensified to remove the obstacles facing investors. No new tenders will be launched before completing the current projects.
He explained that the second phase of the feed-in tariff projects is continuing with a good pace. Companies are awaiting to offer the financial closure models and sign a purchase agreement with the EEHC before October.
He said that Egypt has a chance to produce 90 GW of new and renewable energy—with the largest capacities of wind energy in the Middle East and North Africa of 30 GW. Average solar emission in Egypt allows the production of 60 GW of solar energy.
Community dialogue to announce the solar energy projects
The solar energy companies are holding discussions in Benban this week in coordination with Aswan’s governorate in order to consult with the residents regarding the importance of solar energy projects and their revenues as well as the advantages of establishing the plants and the benefits the residents will reap from these projects.
The heads of the energy companies said that the community discussion is part of the conditions and controls put forwards by banks to fund the projects. Even though Aswan residents are welcoming the projects, it would still be necessary to hold discussions and discuss the conclusions investors came to.
They added that the discussions will include agreements regarding hiring the residents of Benban to be workers in the projects to be launched. An office will be established to take the requests of citizens. During the construction period, about 20,000 workers and technicians.
Investors turn out increasing for feed-in tariff projects as a result of their attractiveness, sector experts say
The situation changed in the second phase of the feed-in tariff after a wave of withdrawal—and a possibility of more—from the projects. Companies are racing to complete their financial closure and sign the energy purchase agreement with the EEHC.
A large number of experts and investors see that there is a large turnout and keenness from Arab and foreign companies to complete their projects due to their attractiveness.
Mohamed Salah El Sobky, the former head of the NREA said that the signing of more than 15 companies on the energy purchase agreement is a good indicator for the second phase of the feed-in tariff and a good sign of the attractiveness of the projects and their expected revenues.
He explained that the law has allowed developers to acquire projects of a capacity of up to 100 MW. Some companies have a strong desire for acquiring projects; however, the law is hindering them.
Hafez Salmawy, the former chairman of the Egyptian Electric Utility and Consumer Protection Regulatory Agency, said that the feed-in tariff projects will achieve a leap in the production of electricity, especially that the strategy of the Ministry of Electricity includes diversifying the sources of production to reduce the reliance on natural gas and carbon emissions.
He explained that international finance institutions have agreed to finance the projects planned to be implemented by Arab and global companies. He added that the plants must be implemented immediately especially that they were delayed for two years after banking institutions rejected their financing in rejection to the article of arbitration taking place in Egypt in case a dispute took place.
Salah Arafa, the solar energy expert and professor at the American University in Cairo (AUC), said that Egypt has delayed the use of solar energy for too long and this opportunity must be seized to achieve real development in Benban.