Solar power solution firm Cairo Solar-Egypt is set to terminate its all feed-in tariffs projects in Egyptian new and renewable energy field, Chairman Hesham Tawfik told Amwal Al Ghad Thursday.
This step comes after Egyptian Electricity Minister Mohamed Shaker met with renewable energy investors Thursday in which both sides failed to resolve problems with the feed-in tariff.
A senior sources at the ministry told Amwal Al Ghad that around 35 firms working in new and renewable energy field intend to withdraw executing the feed-in tariffs projects amid the appalling terms of electricity ministry.
Tawfik added that during the meeting, the ministry continued defending its stance on arbitration, i.e. the project is Egyptian, implemented on Egyptian land, thus there is no reason for foreign intervention.
The ministry also mandated that solar power firms should provide around 85 percent of the finance from foreign banks while the other 15 percent to be provided by local banks.
Chairman Tawfik noted that company’s current partners in the project did not announced their withdraw until now.
He asserted that the investors would suffer to provide necessary funds for power projects and would not be able to get projects’ total cost through local banks.
Tawfik pointed out that local lenders do not enjoy the potential of funding power projects with the coming period as they will not be able to finance more than 10 percent of the total cost of the 50MW-project. The total cost of the 50MW-project is estimated at US$100 million.
International financing organisations would not fund any solar power project in case that the ministry continued defending the local arbitration term, the chairman clarified.
Cairo Solar and a group of Egyptian investors have injected 41 million Egyptian pounds in the solar power project, i.e. 15 percent of its capital, among the Feed-in Tariffs programme (FIT), the chairperson stated, adding that his company has invested around 6.5 million pounds in the project until now.
To execute the project, Cairo Solar succeeded to have British partner after a 6-month negotiations to develop the project, conduct necessary studies, in addition to get the approval of the International Finance Corporation (IFC) to finance the project.
In 2014, the ministry first announced the feed-in tariff system, targeting 4.3 gigawatts of wind and solar projects to be established over three years.
The New and Renewable Energy Authority had originally signed 56 agreements with companies and alliances for solar and wind power plants. The state allocated almost 7,900 kilometers of land for the new projects.
Egypt has also allocated US$13.5 billion to up its share of power generated by renewable sources to 20 percent in 2020, later pushed to 2022.