(MENAFN- Daily News Egypt) The Ministry of Electricity sent a letter to the Ministry of Finance to issue financial guarantees for 30 solar power plants companies within the second phase of the feed-in tariff programme.
Government sources told Daily News Egypt that the Ministry of Finance has completed the issuance of about 17 financial guarantees and is working to complete the issuance of 13 more to be sent to the Ministry of Electricity.
The sources added that the financial guarantees are the state provision of official guarantees to investors that ensure that the government will pay the dues of those companies in case of the Egyptian Electricity Transmission Company (EETC)€™s failure to pay their dues. These guarantees are often obtained for projects put forward by the government but implemented by the private sector.
The source explained that the financial guarantees are the remaining step for companies to present their paperwork to banks to begin implementing the projects, noting that many companies are now processing permanent licenses for production of electricity.
A few weeks ago, the EETC approved the financial models submitted by 30 companies to set up solar power plants in Benban, Aswan within the second phase of the feed-in tariff programme.
The companies have received a letter to accept their financial models, and investors will begin actual actions to implement solar power plants in Benban, Aswan, with capacities of up to 1,500 MW and investments of $1.5bn.
The EETC will buy energy from the solar power plants for 25 years at 8.4 US cents per kWh. Foreign banks will fund 70% of the value of the projects, while the remaining balance will be secured through local banks or from the companies themselves.
The government launched the renewable energy feed-in tariff programme in 2014 to establish projects to produce electricity from wind farms and solar power plants at a total capacity of 4,300 MW, with investments of $7bn. This includes 2,300 MW from solar power, including 300 MW from plants that produce less than 500 kW. In addition, the programme includes 2,000 MW from wind farms.
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