Egypt to offer renewable investment scope for $6bn or more by 2018

10 January 2016 (Last Updated January 10th, 2016 18:30)

Egypt is reportedly set to offer investment scope for at least $6bn in the country’s green energy sector until 2018, under its feed-in-tariff programme.

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Egypt is reportedly set to offer investment scope for at least $6bn in the country’s green energy sector until 2018, under its feed-in-tariff programme.

The country is focusing on renewable energy developments, which opens up new investment opportunities, according to EFG Hermes, an investment bank operating in the Middle East and North Africa region.

This shift towards clean energy developments has been prompted by rising power demands in the country and pressure on fuel supplies for conventional energy generation.

Egypt’s new and renewable energy authority has set a target to source 20% of its power mix from renewable by 2020.

EFG Hermes indicated that the country will need to add about 8GW to its existing capacity to meet the rising demands, which is to include 5.5GW of wind power and 2.5GW of solar power.

The country has already deployed varying models for boosting its renewable capacity, which includes bilateral agreements with private developers, feed-in-tariff supports and competitive bidding for build-own-operate and build-operate-transfer tenders.

"Egypt’s renewable energy sector is very promising and will become substantially more so as roadblocks including currency convertibility are cleared."

EFG Hermes infrastructure private equity managing director Bakr Abdel-Wahab said: "Egypt’s renewable energy sector is very promising and will become substantially more so as roadblocks including currency convertibility are cleared.

"To be able to raise equity for these projects, for example via a dedicated renewable energy fund, investment managers require immediate tangible opportunities for investment. Investors do not prefer to hold commitments without disbursements for excessive periods.

"We would also expect that larger developers will consolidate projects and develop strategic partnerships within the sector, resulting in the acceleration of renewable energy development."

The investment giant is also considering setting up a $200m renewable energy fund to drive wind and solar energy developments in Egypt and the wider region.


Image: Egypt is expected to install about 8GW of renewable energy projects including solar and wind by 2020. Photo: courtesy of Naypong / FreeDigitalPhotos.net.