Norway’s Scatec Solar starts field activities in Egypt, eyes $600mn investments
Norwegian solar power producer, Scatec Solar said it has begun engineering and procurement related activities in Benban and Zafarana, two solar sites located in interior Egypt.
Scatec Solar said in a statement released Monday that it plans to invest more than $600 million in Egypt’s solar energy programme over next two years.
It said it had launched a series of series of activities on the ground to contribute to the timely construction of what surely will be one of the world’s largest solar energy sites.
“Topography” and “Geotechnical” studies have already been completed, work has commenced on the Environmental and Social Impact Assessment and weather stations are being installed at the two sites to measure solar irradiation, heat and soiling losses that will impact the future efficiency of the solar projects.
“Our international experience has taught us the importance of detailed pre-planning for execution of projects so that we can quickly deliver much-needed electricity, once the authorities have issued all the agreements and permits,” said Raymond Carlsen, CEO of Scatec Solar, an integrated Independent Power Producer (IPP), with a proven track record for building, owning and operating solar energy plants in the United States, Europe, Africa and Latin America.
In order to fulfill Egypt’s solar plans, Mohamed El Sobki, Chairman of Egypt’s New and Renewable Energy Authority (NREA) said the government is to “adopt new polices and issue the required legislation to attract international participation and investment”. He was speaking in an exclusive interview to Advanced Conferences and Meetings ahead of its major conference in Cairo titled “Implementing strategies to finance, construct and operate solar plants in Egypt.” Government officials and key private sector players will participate in the conference, which is part of the push to operationalize Egypt’s pioneering solar energy programme.
“Our plan to invest more than USD 600 Million in Egypt’s solar energy programme over the next two years will be a significant boost to Egypt’s economy,” said Terje Osmundsen, Scatec Solar’s Senior Vice President for Business Development, who is speaking at the conference.
Scatec Solar (SSO) has signed agreements to participate in five projects totaling 250 MW (AC) under Egypt’s new FiT photovoltaic programme. One of the biggest players in Egypt’s new solar programme, SSO will be the lead developer in one project, while in four others it will participate as strategic investor, EPC and O&M provider. The company has initiated the process to raise project finance from banks, though fund commitments rest on the authorities issuing bankable contractual documents and required permits.
To meet the rapidly rising demand for electricity, Egypt decided to diversify its energy mix and invited foreign solar energy developers to construct 2.3 GW utility-scale solar plants in the next two years. Said CEO Carlsen “The determination with which the Government is pursuing solar energy matches the fundamentals of the economy that require more electricity to promote economic growth, provide clean energy and create more jobs.” As part of SSO’s corporate philosophy, training will be provided and skills transferred to the local population during the construction of solar plants, which generates hundreds of jobs, as well as for the subsequent operation and maintenance of the projects. SSO’s Kalkbult project in South Africa, the first and biggest solar plant in the whole African continent when it was built, was commissioned three months ahead of schedule with zero accidents using local labour.
To support its activities in Egypt, Scatec Solar has decided to establish a regional headquarter located in Cairo’s Nile City Tower. “The first big PV development in Egypt is a great opportunity for the country and for SSO. We will deliver on our commitments in the timeline and frameworks set by our stakeholders,” said Pål Helsing, head of SSO’s Egypt operations. SSO has appointed Fedicom Trading and Engineering LLC to be its local development partner.
As an IPP, Scatec Solar takes responsibility not only for developing, financing and building solar power plants, but also for its long term operation and maintenance. SSO’s experience in Honduras, Jordan, Rwanda, South Africa and the United States shows that incorporating the particularities of the local terrain and weather conditions at the design stage is vital for the plants’ sustained durability and success. Said Carlsen. “All our stakeholders – the local authorities, consumers, banks and investors – want solar plants to perform successfully to deliver electricity and revenue for 20 years. Solid engineering and construction design is vital to ensure that.”
Currently, SSO’s internal teams are fully engaged in processes with regard to finance, development and EPC activities relating to logistics, sub-contracting, infrastructure and supplies. Workshops have been held in Cairo to conduct Stakeholder Analysis as part of the company’s integrated, solution-oriented approach to implementing solar projects. “We share our experiences and lessons learnt in setting up solar plants so that our strategic partners, sub contractors and suppliers in Egypt can acquire capability to build PV plants and be part of this journey” said Carlsen.
To make Egypt’s new solar policy a success, capacity building and field level coordination is required among the 40 solar developers at each of the two sites. Using its past experience and in keeping with its collaborative style of functioning, SSO is currently taking the lead together with other developers for setting up a “one stop shop” arrangement with regard to simplifying logistics to avoid delay-causing bottlenecks during the construction phase. Streamlining logistics will improve cost-effectiveness, efficiency and safety, thus benefitting all the developers in the two solar parks. Both Benban and Zafarana are located relatively far from common industrial service providers and the needed infrastructure.
By 2022, Egypt plans to supply 20 percent of installed capacity from renewable energy. Over the next seven years, the foreign investments required to build the planned 6 GW of solar will be about USD 9 -10 billion. As solar plants run on sun energy, which is free and abundant, initial investments are offset by huge gains made by avoiding the import of fossil fuel to run power stations. Imported fuel is expensive, polluting and a drain on precious foreign exchange reserves. In addition, PV plants are rapidly constructed, safe, noiseless and clean, involving zero carbon emissions. Furthermore, tariffs for PV plants are affordable and predictable as there are no turbulences caused by fluctuations in oil prices or currency valuations. Based on a study conducted by the Council for Scientific and Industrial Research, South Africa gained USD 30 million from SSO’s three solar plants in the first six months of this year alone. The gains came from avoiding production losses due to power outages and savings from not having to import fossil fuel.
According to its website, Scatec Solar is an integrated independent power producer, aiming to make solar a sustainable and affordable source of energy worldwide. Scatec Solar develops, builds, owns and operates solar power plants and delivers power from 219 MW in the Czech Republic, South Africa and Rwanda.
The company is in strong growth and has 207 MW under construction in the US, Honduras and Jordan as well as a solid pipeline of projects under development in Africa, Middle East, Americas, and Asia.
