Egypt has announced that it is readying a tender for 250 megawatts of wind energy, according to the country’s National Renewable Energy Association (NREA).
The NREA chairman Mohamed El Sobki said yesterday at the World Future Energy Summit in the capital that more renewables projects would help the country restructure its power market, including substantially decrease fuel subsidies.
“The number of studies addressing electricity in Egypt show fuel costs represent 60 per cent of our power generation costs,” he said.
Mr El Sobki said that Egypt was exposed to the market for natural gas and that based on current domestic demand if fuel prices go up even “a little” then its costs could soar. If natural gas prices increase three times over what they are now for example, to US$9 from $3 per million British thermal units, then “generation costs will reach 80 per cent”, he said.
The government spent 45 billion Egyptian pounds (Dh23.04bn) on energy subsidies in the first six months of the fiscal year that began in July. The subsidies have helped to turn Egypt from a net energy exporter into a net importer over the past few years.
Yesterday's wind project announcement comes after the Egyptian president Abdel Fattah El Sisi said on Monday that the country would maintain its aggressive energy strategy, which includes 4300MW of renewable energy projects. Wind accounts for 2000MW of that.
Gabriel Castelain, Mena vice president of business development for France’s EDF, said the 250MW wind tender is still at an early stage compared to solar projects – which account for the remaining 2300MW – that are in more advanced stages.
“Egypt is a great country of interest for us for both solar and wind,” Mr Castelain said, adding that the French company was already pre-qualified for solar projects in Egypt. “For wind, we are looking at where to come and develop, but we’re still at the early stages.”
Dubai-based Access Power MEA is also keen to get a larger hook into Egypt. The company has applied to finance a portfolio of 300MW of solar power projects and in the next weeks expects the government to announce the winners.
In terms of wind projects in the North African country, the Access Power chairman Reda El Chaar said that the announcement is “only an idea”.
“When the tenders come out, we will be in touch,” he said.
The company recently announced a deal with Eren Developpement for a new, early stage financing facility for renewable energy projects in Africa. The privately-funded vehicle plans to have a portfolio of power assets in Africa worth US$500 million – and Egypt is slated to take a sum.
Mr El Chaar said Access Power expects to fund $150m worth of projects a year over the next three to five years. “The quicker we get our money working the better it is,” he said.
lgraves@thenational.ae
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