NREA to be­gin with­draw­ing land granted for wind plants un­der feed-in tar­iff

The Daily News Egypt - - Front Page - By Mo­hamed Farag

The New and Re­new­able En­ergy Au­thor­ity (NREA) will start to with­draw land granted for wind en­ergy projects un­der the feed-in tar­iff sys­tem next week.

Sources at the NREA told Daily News Egypt that nine com­pa­nies ob­tained land for the im­ple­men­ta­tion of wind power plants in the Gulf of Suez re­gion as part of the feed-in tar­iff pro­gramme. How­ever, he said, they did not sub­mit let­ters of banks’ ap­provals to fi­nance the projects. There­fore, they will be un­able to fi­nance their projects on the sched­uled date of 28 April, ac­cord­ing to the feed-in tar­iff project’s terms.

Af­ter the dead­line, the Egyp­tian Elec­tric­ity Trans­mis­sion Com­pany will no­tify the of­fi­cials of the NREA that it will with­draw the land granted un­der an usufruct sys­tem for in­vestors be­cause they did not com­plete the fi­nan­cial clo­sure of the projects on time.

The to­tal area of land to be re­cov­ered by the NREA is es­ti­mated at 90 sqkm, with 10 sqkm granted to each com­pany. These com­pa­nies in­cluded Aqua Power, Infinity, Elsewedy Elec­tric, Al­cazar, Mas­dar, Al Fa­nar, and Fal­con.

The sources fur­ther added that the re­cov­ered land can be re­granted by the NREA to other in­vestors un­der an usufruct sys­tem in up­com­ing auc­tions next month.

They con­tin­ued that the NREA has the right to keep the mea­sure­ments and stud­ies con­ducted on the al­lo­cated land and in­vestors can­not claim re­funds for these stud­ies or mea­sure­ments.

Ac­cord­ing to of­fi­cial sources, the min­is­ter of elec­tric­ity, Mo­hamed Shaker, is pre­par­ing a me­moran­dum to present to the cab­i­net about the in­vestors’ fail­ure to com­plete the fi­nan­cial clo­sures of the projects.

The me­moran­dum will men­tion that all the com­pa­nies were un­able to abide by the projects’ sched­ule be­cause of the low value of the feed-in tar­iff, which means that it was not an in­di­vid­ual case.

The sec­ond phase of the feed-in tar­iff projects be­gan on 28 Oc­to­ber 2016.From the very be­gin­ning, the in­vestors op­posed the pur­chas­ing price of en­ergy of­fered by the govern­ment be­cause of its low value, which prompted fi­nan­cial in­sti­tu­tions to refuse fund­ing the projects.

Ac­cord­ing to the terms of the sec­ond stage, an in­vestor should achieve the fi­nan­cial clo­sure of the wind en­ergy projects within 18 months from 28 Oc­to­ber 2016,pro­vided that they would pro­vide a let­ter of com­mit­ment from for­eign fi­nanciers within a pe­riod of 12 months. These terms also stip­u­late that 60% of the fi­nanc­ing of those wind en­ergy projects shal be pro­vided by for­eign sources and the other 40% from lo­cal sources.

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