Egypt's New and Renewable Energy Authority (NREA) selected selected 69 large-scale projects of more than 20 MW last year as part of an initial renewable energy tender for 2 GW of solar capacity.
The country has set an ambitious goal to install 4.3 GW of wind and solar power by 2017, including 2.3 GW of solar (2 GW of large-scale and 300 MW of small scale under 500 kW) and 2 GW of wind. The tender attracted massive interest from both international and local players but nevertheless fell short of the 2 GW wind target, according to Apricum.
As a result, the country is expected to launch a second procurement round for wind to fill the remaining capacity sometime before July, according to Berlin-based consulting firm Apricum. In addition, a combined capacity of 720 MW of wind projects is currently under construction from the private sector thanks to an established merchant independent power producer (IPP) scheme.
With a chronic electricity supply shortage, Egypt is in desperate need of additional generation capacity of 13 GW to meet soaring domestic power demands over the next five years.
Apricum describes Egypts generous feed-in tariff (FIT), announced in September 2014, as the cornerstone of the countrys renewable energy program. It points out that while Egypt set its ambitious renewable energy target against a backdrop of dire economic and energy-related challenges, it is nevertheless attracting great interest from both leading global as well as local players.
Commenting on the 2 GW large-scale solar capacity tender, Apricum project manager Martin Mitscher said, "After the FIT announcement, we saw a rush from local and international solar developers to get their foot in the door. A stunning 178 project proposals were submitted for more than double the announced capacity of 2 GW."
Mitscher estimates Egypts solar PV market and wind market to each grow to around 2 to 3 GW cumulatively by 2020.
With 69 large-scale solar projects of more than 20 MW achieving qualification, the key step now for the government is to provide a bankable framework to potential debt providers so that developers can reach financial close, Mitscher pointed out, stressing the need for the government to harness the enthusiasm of the market as well as the countrys impressive solar and wind resources.
Exhibiting the necessary key drivers of rapidly growing power demand, exceptional availability of solar and wind resources and the need to reduce domestic fossil fuel consumption, Egypt has all of the hallmarks to become a sizable renewable energy market in the short term, according to Mitscher.
"Egypt is definitely on the hot list of global renewable power developers at the moment," he added. "With well-managed implementation, Egypt could become one of the leading renewable energy markets in the MENA region in a short space of time."
According to Apricum, the FIT program has succeeded in attracting many well-known international industry heavyweights as well as local players keen to take a share in this growing market.
Egyptian investment bank EFG Hermes recently announced that it was considering further investment in renewable energy projects and looking to possibly launch a leasing business in Egypt in the coming months amidst an improving economy in the country.
In addition, Bahrain-based investment and development firm Terra Solar Ventures run by Swiss financier David Heimhofer — has said it plans to invest up to 3 billion in Egyptian solar projects.