The New and Renewable Energy Authority (NREA) will start to withdraw land granted for wind energy projects under the feed-in tariff system next week.
Sources at the NREA told Daily News Egypt that nine companies obtained land for the implementation of wind power plants in the Gulf of Suez region as part of the feed-in tariff programme. However, he said, they did not submit letters of banks’ approvals to finance the projects. Therefore, they will be unable to finance their projects on the scheduled date of 28 April, according to the feed-in tariff project’s terms.
After the deadline, the Egyptian Electricity Transmission Company will notify the officials of the NREA that it will withdraw the land granted under an usufruct system for investors because they did not complete the financial closure of the projects on time.
The total area of land to be recovered by the NREA is estimated at 90 sqkm, with 10 sqkm granted to each company. These companies included Aqua Power, Infinity, Elsewedy Electric, Alcazar, Masdar, Al Fanar, and Falcon.
The sources further added that the recovered land can be regranted by the NREA to other investors under an usufruct system in upcoming auctions next month.
They continued that the NREA has the right to keep the measurements and studies conducted on the allocated land and investors cannot claim refunds for these studies or measurements.
According to official sources, the minister of electricity, Mohamed Shaker, is preparing a memorandum to present to the cabinet about the investors’ failure to complete the financial closures of the projects.
The memorandum will mention that all the companies were unable to abide by the projects’ schedule because of the low value of the feed-in tariff, which means that it was not an individual case.
The second phase of the feed-in tariff projects began on 28 October 2016. From the very beginning, the investors opposed the purchasing price of energy offered by the government because of its low value, which prompted financial institutions to refuse funding the projects.
According to the terms of the second stage, an investor should achieve the financial closure of the wind energy projects within 18 months from 28 October 2016, provided that they would provide a letter of commitment from foreign financiers within a period of 12 months. These terms also stipulate that 60% of the financing of those wind energy projects shal be provided by foreign sources and the other 40% from local sources.