Egyptian solar company SolarizEgypt says it has secured a long-term PPA for a utility-scale solar power project it will build in the Suez governorate, a deal it says is the first private power purchase agreement for utility-scale solar awarded in the country.
SolarizEgypt said the 25-year agreement was awarded by the Arabian Cement Company (ACC) – the third largest cement producer in Egypt – at Ain Sokhna-Suez. The contract relates to a 6 MW solar power plant expected to generate around 14 GWh per year to meet up to 4% of the electricity needs of a facility owned by ACC.
The project is scheduled to start commercial operation by April, the company said.
“This project is enabled by a unique business model, where SolarizEgypt acts as an independent power producer and sells electricity directly to ACC, with [Egyptian pound]-denominated competitive pricing to the current governmental tariffs,” it said in a statement.
“What we can say is that the PPA is priced at a discount to grid price,” a company spokesperson told pv magazine.
Euro and Egyptian lenders on board
The $5.5 million solar project will be backed by QNB AlAhli, one of Egypt’s largest commercial banks, under the Green Economy Program of the European Bank for Reconstruction and Development (EBRD). The two lenders are supporting further loans to private sub-borrowers for energy efficiency and renewable energy projects which are of particular relevance in the context of the high energy intensity of the Egyptian economy.
Egypt has thus far developed large-scale solar through its FIT scheme. One result of the program, which has now expired, was the 1.8 GW Benban solar complex.
Egypt has now moved from FITs to auctions, with a first, 600 MW tender launched in December 2017 and ongoing; and a second, 200 MW exercise in the process of being finalized. In the latter, the lowest electricity price tariff bid was $0.02752/kWh. In the first tender, the Egyptian Electricity Transmission Company set a maximum price of $0.025.