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IPP system attracts foreign companies to invest in local energy projects - Daily News Egypt

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IPP system attracts foreign companies to invest in local energy projects

Electricity Ministry receives requests to establish IPP projects with $2.5bn investments


Ministry of Electricity is close to completing the procedures and controls for establishing new renewable energy plants under the independent power producer system (IPP), which allows companies to set up plants and sell electricity directly to individuals or factories according to an agreed-upon tariff.

Daily News Egypt learned that the Ministry of Electricity received requests from foreign companies to implement projects under this system with investments up to $2.5bn. The regulations of the IPP system will be ready this year, according to the ministry.

The entry of Arab and foreign investors in the local market contributed to the decrease in the costs of producing renewable energy in Egypt, and would create more investment opportunities in the coming period.

The electricity sector has been able to take several reform measures, initiatives, and policies to secure and maintain the supply of electricity, improve efficiency, and open markets for the private sector to invest in traditional and renewable energy, smart grids, and electrical transmission.

Some of the important benefits of these policies are ending the frequent power outages and achieving a sufficient and safe reserve of electrical energy, as the sector has managed over the past five years to add more than 28GW.

Ministry of Electricity is currently working to raise the efficiency of electricity networks through an integrated plan to improve and develop electricity transmission, distribution, and smart meters with a total investment of more than $4bn.

Several measures were taken to encourage private sector participation in renewable energy projects, most notably the recently issued law to stimulate the production of electricity from renewable sources. The private sector was able to implement projects to produce electricity from solar energy under the feed-in tariff system with a capacity of 1.465GW and $2bn investments.

The Egyptian Electricity Transmission Company signed agreements to buy the electricity produced from the private sector for a period of 25 years at a fixed rate, and investors obtained lands from the New and Renewable Energy Authority to establish projects under the usufruct system.

In accordance with the issued procedures, renewable energy projects have been implemented under net metering which allows the solar PV system owner to sell excess solar energy to electricity distribution companies.

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