The Egyptian government has rolled out financial initiatives to support expansion of renewable energy infrastructure as the country gets to ready to host landmark auctions of 4 GW renewable energy capacity.
Egypt’s government has approved new feed-in tariffs for renewable energy projects just weeks ahead of a planned auction of 2 GW capacity each of wind and solar power projects. The electricity minister hopes that these new tariffs will attract bidders to the auctions, and provide certainty to investors.
The tariff regulations are quite comprehensive, and cover small as well as large-scale power projects. Renewable energy projects owned by households would receive 0.848 Egyptian Pounds (LE0.848) for every kWh generated. Commercial power generators would receive LE0.901 per kWh and LE0.973 per kWh for projects under 200 kW and 200 to 500 kW respectively.
Large-scale projects with capacity between 500 kW and 20 MW will be eligible for tariff of US$0.136 per kWh, while projects with capacity between 20 MW and 50 MW will receive US$0.1434 per kWh. The government has set 50 MW as the maximum limit for project size, but requests for higher capacity may be considered.
The government will also provide financial and other incentives to project developers, households, and commercial producers. For small-scale projects, the government will offer low-cost debt financing, while large-scale project developers will be allowed to pay custom duties at concessional rates for imported equipment.
The Egyptian government is expected to launch the auction for wind and solar power projects next month. These auction is part of long-term program which would see the Egyptian government auction a total of 30 GW of power generation capacity based on renewable energy and coal. The wind energy projects auctioned are expected to be commissioned by the end of next year while the solar power projects would be commissioned by June 2015.
Egypt has set a target to generate 20% of the power demand from renewable energy sources by 2020. The emphasis would be on wind energy as the government plans to add 7,200 MW new. capacity by the end of this decade.
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