The European Bank for Reconstruction and Development (EBRD) has allocated $500 million in funding for Egypts fledgling solar energy program, which is targeting the installation of 2 GW of PV capacity over the next few years.
The 2 GW goal will be achieved via the development of 40 individual solar parks of around 50 MW each as Egypt aims to source 20% of its energy from renewable sources by 2020.
The bulk of the planned solar parks will be located on a 1.8 GW site near Benban in Upper Egypt, and the EBRD is hopeful that its initial tranche of financing can trigger further debt and equity investment from financiers to the tune of around $1.5 billion.
The total project cost for 2 GW of solar in Egypt is expected to reach $4 billion, meaning half of that figure would still have to be sourced either from within government or via additional private investment.
Private firms will, however, take the lead on the development of the solar projects, with the EBRD working closely with Egyptian authorities to provide technical cooperation and legal and regulatory frameworks to support renewable additions. Issues that have been addressed include contractual agreements, the solar grid code and environmental and social due diligence.
The EBDRD director of power and energy, Nandita Parshad, said that the successful implementation of Egypts FIT will unlock the countrys solar potential by "providing a regulatory framework that can attract private capital".
She added: "This initial program is significant in itself. But the really exciting element is that once the country has an established model for private investment in renewables, there will be huge potential for widespread, rapid deployment, thanks to Egypts fantastic resources and the falling cost of renewable generation."
Egypts FIT was introduced in September last year at a rate of $0.118/kWh for households and slightly higher for commercial producers. This summer the Egyptian Electricity Transmission Company (EETC) launched a 200 MW solar PV tender in the country as part of the governments initial foray into clean energy support.