250MW wind farm to be built in Red Sea’s Ras Ghareb

CAIRO – 6 March 2018: Prime Minister Sherif Ismail witnessed Tuesday the signing of an agreement between Egyptian Electricity Transmission Co. (EETC) and a consortium including Orascom Construction, France’s ENGIE and Japan’s Toyota Tsusho Corporation to construct a 250 MW wind farm in Ras Ghareb, near the western shore of the Gulf of Suez.

The project will be executed on a build-own-operate (BOO) basis under a 20-year Power Purchase Agreement (PPA) with EETC. The investment cost of the project amounts to around $400 million. As per the agreement, the farm will be connected to the national electricity grid experimentally by mid 2019.

Electricity Minister Mohamed Shaker said that the building of the farm comes as part of the ministry’s plan to increase dependency on renewable energy sources so that the ratio of power generation from renewable sources reaches 20 percent of Egypt’s electricity production by 2022, and to 42 percent by 2035.

The wind farm marks the first renewable energy Independent Power Producer (IPP) project of its kind and size in Egypt, according to a statement by Orascom Construction sent to Nasdaq Dubai.

The funding is expected to be provided by Japan Bank for International Corporation (JBIC) in coordination with Sumitomo Mitsui Banking Corporation and Société Générale under a Nippon Export and Investment Insurance (NEXI) cover, the statement said.

Construction of the plant will take approximately 24 months. Upon completion, the consortium will operate and maintain the wind farm for 20 years.

In a bid to encourage investment in renewable energy, the government announced a feed-in-tariff (FiT) scheme in September 2014, which involves private sector companies to build solar plants.

Divided over two rounds, the first round of the scheme witnessed three developers pursuing their projects at the huge solar power project in Benban, near Aswan governorate.

The International Finance Corporation (IFC) approved $660 million in funding to 13 FiT projects in Benban. These projects are worth a total of $730 million and have a total capacity of 500MW.