Page 4 - AfrElec Week 26

AfrElec COMMENTARY AfrElec
Egypt’s race for solar
Egypt’s Benban complex is set to be completed in 2019, but the government is now pursuing a new generation of low-tariff solar projects, writes Richard Lockhart
EGYPT
WHAT:
Egypt’s Benban complex is nearing completion
WHY:
MDMs have provided lending support, while feed-in tariffs have eventually proved attractitve
WHAT NEXT:
Egypt is receiving record low tariff bids of under $0.03 per kWh, but
needs to reduce risk to attract more lending from commercial banks
EGYPT is con dent that at all 1,465 MW of the Benban solar power complex will be built by December, with 1,000 MW already online.
Speaking this week, New and Renewable Energy Authority CEO Mohamed al-Khayyat said that 20 individual solar projects had so far been linked the grid, bringing online 1,000 MW of capacity. A total of 32 projects are planned.
e project is critical to Egypt’s prospects of boosting renewable power to 20% of total output by 2020, controlling CO2 emissions and meeting rising power demand, and is equivalent to 90% of the country’s adjacent Aswan High Dam.
Calling the $2.8bn project a “new nucleus” for solar electricity generation in Egypt, he stressed that Benban was the largest of its kind in the world, occupying an area of 37 square km and providing 10,000 direct and indirect jobs.
He added that 30 of the 40 companies involved in construction were Egyptian, with the other 10 coming from abroad. A key innovation is that the private sector is playing a crucial role in developing and operating the 32 individual projects.
e Renewable Energy Authority sees solar as a key plank in reducing Egypt’s use of fossil fuels, along with wind and hydro. Renewables accounted for just 3.5 TWh of generating out- put in 2018, or 1.75%, compared to 160.9 TWh (80%) from gas and 13.5 TWh (6.75%) from hydro, according to gures from BP
Including fuel oil, fossil fuels account for 90% of the country’s power needs, while CO2 emis- sions have reached 224.2mn tonnes.
Khayyat said that Egypt aimed to generate 20% of its total electricity from renewable energy by 2022, and more than 42% by 2035.
MDM funding
While overseen by the New and Renewables Energy Authority, the project is being nanced and run by a range of international private com- panies and multilateral development banks.
e World Bank’s International Finance Cor- poration (IFC) agreed in 2017 to provide $653m of so lending to promote more investment by the private sector and the 13 private companies that will operate plants at the site.
e World Bank’s Multilateral Investment and Guarantee Agency (MIGA) is providing $210mn of political risk insurance to private lenders and investors.
Meanwhile, the UN’s Green Climate Fund and the European Bank for Reconstruction and Development (EBRD) have implemented a $1bn, 5-year funding package to create a wider renewable energy nancing framework in Egypt that would leverage project nancing for the pri- vate sector. Part of these funding would be used by Benban.
Khayyat’s positive comments and the con- nection of 1,000MW represent quite a recovery for Egypt, as the Benban project was slow to take o .
The country’s first solar tender round between 2014 and 2016 at a feed-in tari (FIT) of $0.1434 per kWh failed to attracted much interest as con dence in the country’s business
Fossil fuels account for 90% of the country’s power needs, while CO2 emission have reached 224.2mn tonnes
P4
w w w . N E W S B A S E . c o m Week 26 03•July•2019