Almost ten years ago, the government of Egypt set a target to generate 20 percent of the country’s energy from renewable sources by 2020 and yet here we are in 2018 and the country has almost none to speak of. Ugo Salerno, CEO of RINA explained in an interview that to date the country gets only 1 percent of its energy from renewables.
With Salerno’s company’s help, however, Egypt will soon be the home of one of the largest solar PV projects in the world.
“It’s an ambitious project because they are starting basically from scratch,” said Salerno. “This is showing their will and also the support of international financial institutions,” he added.
The Benban project consists of 36 different sites, which will each be home to between 20 and 50 MW of solar capacity. The site itself is 37 square kilometers (14.2 square miles) and the 36 projects are being developed by various different independent power producers (IPPs).
“The IPPs include EDF, Scatec, Access, and some of the largest IPPs in the world,” said Simon Turner, RINA Consulting Technical Director.
Funding for the projects is coming from various different banks, including the European Bank for Reconstruction and Development (EBRD) and Proparco.
Turner said it was the entry of the development banks that are making the projects pencil.
“One of the main issues with this project was the PPA,” he said, adding that “there is a difference in risk appetite between private banks and the financial institutions.”
A Bloomberg New Energy finance article pointed out that Egyptian banks had difficulties financing projects because the feed-in tariff offered by the government is paid in Egyptian pounds but the debt is raised in dollars and with the volatility of Egyptian currency, the projects were just too risky for those banks.
RINA was hired by EBRD and Proparco to provide technical due diligence and risk assessment for about 15 solar projects throughout Egypt, which the development banks are funding.
Yesterday, NexTracker announced that it was selected by Sterling and Wilson to supply 325 megawatts of its solar trackers to a portion of the Benban solar projects.
This article was updated on Jan 22 at 11:45 a.m. ET. References to Overseas Private Investment Corp (OPIC) have been removed.