Algeria's Ministry of Energy Transition and Renewable Energy has launched yesterday a tender for the deployment of 1 GW of solar capacity.
The procurement exercise will be divided into lots ranging from 50MW to 300MW each.
Selected developers will be awarded a 25-year power purchase agreement (PPA) and each developer will be allowed to tender for one or more lots for a maximum cumulative capacity of 300MW.
The deadline to submit project proposals is April 30.
The tender will be held by Algerian Renewable Energy Company (SHAEMS), jointly owned by state-owned gas giant Sonatrach and power utility Sonelgaz, which will be allowed to take a share of up to 25% in the special purpose vehicles that will own the winning projects.
“Major global investors were waiting for this end-of-year good news,” Mouloud Bakli, the president of Algerian industry association CAPC Energia, told pv magazine. “Several things must be clarified yet, as for example PPA indexation on a foreign currency, arbitration, and the evaluation of local content requirements in the attribution criteria.”
In a previous interview with pv magazine, Bakli said the tender might conclude with prices ranging from DZD5/kWh (US$0.036) to DZD 7/kWh.
Local content requirements will be included in the procurement exercise, but they will not be mandatory for the first tender of the series, as the capacity of the local industry will only just exceed 1 GW by the end of 2022. Solar developers that use locally manufactured PV components may receive additional bonuses on top of the granted fixed tariff.
Another three tenders of the same size will likely be held each year between 2022 and 2024. Furthermore, a 500 MW solar tender was launched by Algerian utility Sonelgaz at the beginning of December.
In 2019, the Algerian government held tenders for off-grid, hybrid solar-diesel, and PV projects. The procurement rounds were part of the country’s plans to deploy 15 GW of solar energy generation capacity by 2030.
Algeria had around 423 MW of total installed solar capacity by the end of last year, according to the International Renewable Energy Agency (IRENA).
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