Seven solar power companies that signed on projects under the terms of the second phase of the feed-in tariff (FiT) program are reportedly considering backing out due to the rising costs, according to Al Borsa.
The companies obtained lands in Benban, Aswan to establish solar power plants with a total capacity of 350MW and total investments of up to $400m.
In addition, the companies are discussing with the Egyptian Electricity Transmission Company (EETC) and the New and Renewable Energy Authority (NREA) the possibility of modifying some aspects related to the structure of the tariff of solar energy or giving tax advantages, especially that the terms and conditions of the second phase of FiT projects were announced before the decision of the Central Bank to float the exchange rate.
Under the terms of the second phase of FiT, companies should secure 60% of the financing of the wind farms and 70% of the fund of solar plants from foreign financing sources.
Furthermore, the terms of FiT phase two states that arbitration in case of dispute will be in the Cairo Regional Center for International Commercial Arbitration, with the possibility to hold it in Paris upon the agreement of both parties of the contract.