The Egyptian Electricity Transmission Company (EETC) has finally announced the developers who succeeded to achieve financial closure under Round 1 of the feed-in tariff program in Benban, in Upper Egypt. The developers are FAS Energy, Infinite and Elf.
The announcement was sent to successful developers by email from the FiT Unit (EETC) late yesterday. Successful developers shall receive an official letter of award with the next steps soon. The financial closure documents of the three developers were approved by virtue of Cabinet Decree no. 64 dated 22/2/2017. They are shortlisted out of a total number of 40 developers who participated in Round 1 and 9 developers who signed the Power Purchase Agreement with EETC in October 2016.
Riad & Riad is proud to be part of the success as it acts as the legal advisor of FAS Energy, one of the winners. Riad & Riad participated in the project from its early beginning, reviewed all project agreements and lobbied for their adjustment to fit the unique financial model adopted by the sponsor, it also negotiated and reviewed the financing documents and assisted in all relevant corporate, licensing and compliance matters.
Developers who did not succeed to participate in Round 1 are automatically transferred to Round 2. The applicable tariff in Round 2 for solar projects with capacity of more than 20 MW and up to 50 MW is USD 8.40 cents/kWh compared to USD 14.34 cents/kWh in Round 1.
Self-equity financing is not allowed in Round 2, as the project must fully be financed through banks or lending institutions with a minimum of 70% of the project investment cost (compared to 85% in Round 1) be in foreign currency secured from outside Egypt. The seat of arbitration in Round 2 shall be Paris, while in Round 1, it was Cairo.
Round 2 is ongoing and developers are scheduled to present letters from foreign banks with the approval for financing their projects before the end of April 2017.
The terms of the second phase of the feed-in tariff project includes securing the 70% of the required financing from foreign sources.