The Minister of Electricity and Renewable Energy (MOERE) announced in a press conference on 06 September 2016 the second round of the Egyptian feed-in tariff (FIT) programme (Round 2), aiming at attracting direct foreign investment and foreign financing for renewable energy projects in Egypt.
The main points raised by the MOERE are the following:
- The official start date of Round 2 will be 28 October 2016.
- The FIT rates for rooftop projects have been increased.
- Energy generated by 20 to 50 MW PV projects previously priced at USD 14.34 cents/kWh will in Round 2 be priced at USD 8.40 cents/kWh. Energy generated by wind projects will be priced at USD 4.00 cents/kWh for 5,000 hours or more at maximum capacity (for the duration of the Power Purchase Agreement).
- Payment will in Round 2 be made 30% at EGP 8.88 and 70% pegged to the USD at the rate applicable on the due date for PV (instead of 15% at EGP 7.15 and 85% pegged to the USD at the rate applicable on the due date); and 40% at EGP 8.88 and 60% pegged to the USD at the rate applicable on the due date for wind (instead of 30% at EGP 7.15 and 70% pegged to the USD at the rate applicable on the due date)
- Project components will under Round 2 need be 70% foreign and 30% Egyptian for solar projects, and 60% foreign and 40% Egyptian for wind projects.
- Only the pre-qualified developers under Round 1 will be eligible to participate in Round 2. In the event that the 2GW capacity for solar and 2GW capacity for wind are not reached, new investors will be pre-qualified to participate in the FIT programme.
- Financial closure must be reached within 1 year for PV projects and 1.5 years for wind projects (as of 28 October 2016), and within 6 months from 28 October 2016, commitment letters from foreign lenders must be presented to the FIT Unit.
- Arbitration in Round 2 will be governed by the Rules of the Cairo Regional Centre for International Commercial Arbitration (CRCICA). The seat of arbitration will be offshore (exact location not announced). The venue of arbitration will be in Cairo at CRCICA.
- If the developers wish to terminate their projects, the termination must be notified to the MOERE by 27 October 2016 by the project companies (SPVs). No termination fee under the Cost Sharing Agreement would be deducted in the case of termination of the projects.