Jordanian PV developer and manufacturer Philadelphia Solar has signed a memorandum of understanting with Egypt's New and Renewable Energy Authority (NREA) to build a 50 MW-ac PV plant as part of the first wave of projects offered by the Egyptian government under its feed-in tariff (FiT) program.
The company signed the deal on the third day of the recently wrapped Egypt Economic Development Conference, which took place March 13-15 in Sharm El-Sheikh. The agreement includes the engineering and construction of a single-axis tracking PV system in southern Egypt and specifies the exact coordinates of the land (about 1 million square meters) to be used for the project.
Philadelphia will sign a power purchase agreement (PPA) with Egypt's transmission company to sell the generated electricity for $0.143 per kilowatt hour for a period of 25 years. The government announced that the PPA draft will be ready for review by the developers in April.
Mohamed Shaker El-Markabi, Egypt's minister of Electricity and Energy, was on hand for the deal, signed by NREA Chairman Mohamed Sobki and Philadelphia CEO Basim Saleh.
Sobki said the plant would be "one of several projects totaling 2,000 MW that will be built as part of the first round under the FiT scheme. We are proud to sign one of the first MOUs with Philadelphia, which is a leading regional player and we look forward to seeing the project tied to the grid soon."
Expressing delight at being part of "the positive growth Egypt is enjoying, which was evident at the conference in Sharm El-Sheikh," Saleh added, "Our aim is to work with the Egyptian public and private sector partners, and with regional and international financing institutions, to help our Egyptian brothers build much needed electricity capacity through PV generation."
Philadelphia solar is one of the few solar manufacturers in the MENA region. It operates 120 MW module assembly line, and a 30 MW specialist offgrid line that producers smaller modules. The company also producers steel for mounting structures, under a licensing agreement with ArcelorMittal.
Egypt has set some very ambitious goals of late, including the installation of 2.3 GW of solar by 2017, a major 3 GW solar development agreement that was also announced on Wednesday and a formidable plan unveiled over the weeknd to build a new capital city near Cairo at a cost of $45 billion.
Some industry watchers in the MENA region have expressed doubt that the country will be able to follow through on the grand plans, pointing out that the government may soon have to revamp the $0.143/kWh FIT, which allows for an extremely generous 35% internal rate of return (compared to feed-in rates in Dubai of $0.0589), and PPA deals.
In addition, say pv magazine sources, land for the proposed 2 GW of solar and, most importantly, the limited grid capacity for new renewable energy installations have yet to be addressed.
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