ACWA Power aims to complete the implementation of its solar plant, part of the feed-in tariff programme, in November, with investments of up to $200m.
The company’s regional manager, Hassan Amin, said that ACWA Power had agreed with China’s Chint for the latter to carry out the construction work of the stations within the feed-in tariff programme. The company obtained the permanent power generation license from the Egyptian Electric Utility and Consumer Protection Regulatory Agency (EgyptERA).
He explained that the clear and declared plans of the government, the credibility in the implementation, and the legislative and investment climate have contributed to attracting Arab and foreign companies and international bodies to participate in the second phase of the feed-in tariff programme after avoiding the problems of the first phase.
He said that the country’s legislative body does not impede investment, yet, improvements should be made. “The state should rely on build-operate-transfer (BOT) projects to ease the burden on the state,” he added.
He pointed out that the speed in turning tenders into active contracts maintains the credibility of the sector to investors of the world, who are seriously looking for the credibility and speed of the government in the implementation of projects put forward.
He said that the state has focused over the past years on solving the electricity crisis and seeking to solve it in a short period through the use of a number of companies that have been able to implement electrical projects within governmental programmes to fill the network deficit in a record time.
He expected construction work on the Dairout power project to begin next year. He explained that the Dairout project has passed through several stages in the last period. It was transferred to Luxor governorate based on the desire of the Ministry of Electricity for the development of Upper Egypt.
He said that the transfer of the project requires coordination between the Ministries of Electricity and Petroleum to supply gas to the area allocated to the project, as well as agreement on the cost of gas supplies to the station. In May, the governmental guarantee from the prime minister was approved, based on the approval of the Ministry of Finance, which includes stipulations for international arbitration.
With regard to the consumption of natural gas, the station will receive gas from the Ministry of Petroleum, then the Ministry of Electricity will be charged the price of production as well as the price of the gas, after which the company pays the cost of gas to the Ministry of Petroleum.
The project is implemented with a combined-cycle system with a production capacity of 2,250 MW. It includes three production units with a capacity of 750 MW at a cost of $2.3bn. The combined-cycle system will be used to reduce the quantities of gas consumed and increase the efficiency of the stations, with gas saved reaching 30%. The plant is scheduled to enter service by 2022 according to the ministry’s plan.
“The company has announced its plan since entering the Egyptian market and aims to inject investments of $10-12bn to implement development projects in the energy sector,” Amin said. “ACWA Power gives great attention to the Egyptian market. The entry of Saudi Arabia’s Public Investment Fund as a partner in the Dariout project is considered a form of main support for the economy. Though the project was delayed, the investment fund is still supportive of it and its implementation.”
Amin said that ACWA Power also signed a memorandum of understanding with the Ministry of Electricity to establish a wind farm in Jabal Al-Zayt and expects to activate that agreement to begin implementing the project on the ground.
He pointed out that the company aims to implement wind projects alongside other projects that will be undertaken in Egypt in the coming period, with plans to contribute to the development of the renewable energy system in the local market through the acquisition of more investment projects in the coming years.