Solar companies aim to complete financial closure for their projects within 26 days, which is the deadline set for financial closure for projects in the second phase of the feed-in tariff venture.
The Ministry of Electricity hopes to give a positive picture to investors that the government is serious about contracting to buy the electricity they produce from solar power plants, based on the feed-in tariff scheme.
The Egyptian Electricity Transmission Company (EETC) has signed an energy purchase agreement with 31 companies to date. The companies also paid for their share of the cost-sharing contracts, leaving only the last instalment and the financial closure to complete all procedures.
A number of officials at several companies urged the minister to extend the deadline two more weeks to enable them to finish all requirements and paperwork required by banks.
Ahmed Ayyad, a project manager at Philadelphia Solar, said that the power purchase agreement (PPA) was signed, while the company is completing financial closure this week.
He explained that the company will start construction work to establish a 50 MW solar power plant by early November, adding that the company is negotiating with Chinese suppliers to provide the solar cells.
Mohamed El Delaey, project manager at Desert Energy, said the companies are in a race against time to complete the financial closure, since they only have a few days remaining with a lot of paperwork stuck in the pipelines.
He noted that the company’s subsidiary, IRC, signed the PPA with the EETC, leaving only the final instalment.
Foreign institutions agreed to to finance part of the cost of the project, including the European Bank for Reconstruction and Development and the International Finance Corporation.
“All the indicators of success or failure of the second phase will appear on 28 October, which is the final date for the feed-in tariff,” said Girgis Abdul Shahid, vice president of Abdul Shahid Legal Consultants.
He added that if companies cannot complete the financial closure on time despite the signing of the purchase agreement, as it is a breach of commitment and contracts.
He pointed out that companies are rushing to complete the financial closure despite the signing of the purchase agreement, especially as the Minister of Electricity announced not launching a third phase.