ACWA Power and Government of Egypt representatives signed a power purchase agreement for 165.5 MW PV the Saudi Arabian energy company will now develop in Benban. (Photo Credit: ACWA Power)
- ACWA Power has announced it has won three projects of 67.5 MW, 70 MW and 28 MW in Egypt’s FiT Program Round 2
- The Saudi Arabian company will be developing and financing all these projects located in Benban on build-own-operate basis
- It expects an investment of $190 million in developing the entire capacity of 165.5 MW
- Project construction as well as financial closure is expected by Q4/2017; the plants are scheduled to enter commercial operation in 2018
- ACWA is partnering with two local companies, Tawakol and Hassan Allam Holding
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ACWA Power has won three solar PV projects in Round 2 of Egypt’s FiT Program II. The Saudi Arabian energy company has signed a power purchase agreement (PPA) with the Government of Egypt for the projects.
The three projects – 67.5 MW, 70 MW and 28 MW – represent an aggregate capacity of 165.5 MW. The projects will be built in the Benban Solar Complex. ACWA Power estimates $190 million in costs on developing and financing these projects on a build-own-operate basis.
Half of this investment will come from the European Bank for Reconstruction and Development (EBRD), the remaining share will be pooled in by the International and Commercial Bank of China (ICBC) and the Multilateral Investment Guarantee Agency (Miga), according to an article in The National.
The article states other developers that have won and signed in the second round include Access Power of Dubai, Scatec Solar of Norway, Alfanar of Saudi Arabia, Shapoorji Palonji of India and France’s EDF. Scatec Solar signed a PPA with the Government of Egypt for six solar power plants back in April 2017 (see Scatec Solar Signs PPAs For 400 MW).
ACWA is partnering with local companies Tawakol and Hassan Allam Holding for the solar projects. Financial close is expected around Q4/2017 when ACWA plans to begin construction. The entire capacity is scheduled to start commercial operations in 2018.
“The Benban projects are significant for being ACWA Power’s first investment in the country and we are confident that we will have many more opportunities to partner with the Ministry of Electricity in its pursuit of energy security and other strategic goals,” said Rajit Nanda, Chief Investment Officer of ACWA Power.
The Benban project belongs to the country’s feed-in-tariff (FIT) program, which is heavily delayed. Egypt had unveiled its FiT program in 2014 with plans to install 2.3 GW of solar by 2017. Out of this, 2 GW were planned to be set up as central power plant capacity with the remaining 300 MW as distributed PV systems smaller than 500 kW. But as global module prices were falling, Egyptian authorities modified the rules and launched a second round with lower tariffs, upsetting many of the participants in the first round.
However, in the meantime multilateral lenders seem to be confident to support Egypt’s solar project. In June 2017, EBRD approved $500 million in financing for 16 solar power projects in Benban (see EBRD Support For 750 MW PV In Egypt). In July, the International Finance Corporation (IFC) announced it will be investing $635 million in the development of 500 MW solar power capacity in Egypt. The money will be used for the construction, operation and maintenance of 11 solar power plants in Benban. (see $635 Million From IFC For Egyptian PV Park)