The Egyptian Ministry of Electricity and Renewable Energy faces late disagreements with solar energy co-investors over domestic arbitration regarding renewable projects. Minister of Electricity, Dr. Mohamed Shaker, said that the investors were already informed on the first day of signing the contract that payments would be in EGP and the arbitration would be in Egypt, Al-Borsa News reported.
CEO of Cairo Solar, Hisham Tawfik, indicated to Al-Borsa News in related news, that he agreed on domestic arbitration in the cost-sharing agreement because the agreement was temporary for the period of a year, while the power purchase agreement lasts for 25 years, during which the government should guarantee investors’ and lenders’ rights.
A source from one of the foreign investing companies stated that Egypt’s insistence on domestic arbitration had caused a multilateral lender co-financing the project to withdraw. Enel Green Power (EGP) spokesman stated to Reuters that “continuous uncertainty from the local authority in managing the process as well as delays in assigning contracts, have led EGP to freeze its business development operations in the country.”
Egypt announced plans to develop renewable power in 2014, when investors piled in. Two years on, many projects have stalled, hitting confidence among foreign investors Egypt sorely needs.