TRME_4_2018

24 Renewable Energy
the most advanced in the region now. When
Morocco started, they had a high local
content requirement for their renewable
programme, but was successful in attracting
international developers like ACWA Power,
Engie and others. This has resulted in
building the local supply chain and boosting
the development of the local content. The
projects there are already in the
construction phase.
Egypt is more recent in its development –
Round II of the FiT programme closed in
2017 and it aims to reach between 1.6-2 GW
of solar power by mid-2019. However, the
construction for Round II projects are yet to
begin as a number of developers are in the
process of reaching full financing. Unlike
in Round I, where developers were
guaranteed a high fixed tariff, in Round II of
the FiT programme, the tariff was reduced.
In contrast the Round II documents were
revised, to make it more aligned and
acceptable to international lenders. This has
led to some delays. Nevertheless, it has still
managed to attract developers and
successfully close projects. Egypt is one of
the countries where there is certainly a
demand for energy, and a lot of developer
interest. If the country manages to bolster
its regulatory framework, address currency
restrictions and improve the rules for
participating in tenders, investors will
become more comfortable in investing in
future projects.
trMe: What about the grid infrastructure
that will support solar projects?
gK: This is one area that has to be looked
Photo Credit : biker3/Adobe Stock
PV iN PiPeLiNe COUNtrY CaPaCitY (MW) statUs CLieNt
SOLAR IPP (WEST NILE) Egypt 600 Prequalification NREA
SOLAR IPP (KOM OMBO) Egypt 200 Bid Stage EETC
NOOR MIDELT Morocco 800 Bid Stage MASEN
TUNISIA PV Tunisia 70 Bid Stage STEG
TOZEUR PV Tunisia 10 Bid Stage STEG
CsP iN PiPeLiNe COUNtrY CaPaCitY (MW) statUs CLieNt
TAQA CSP Egypt 250 Announced TAQA Arabia
WEST NILE CSP Egypt 100 Announced —
NOOR MIDELT Morocco 800 Bid Stage MASEN
Sources: MESIA
into because the grid infrastructure may
need upgrading in these countries and it may
be a challenge in the future for the large
programmes if this is not addressed.
Let’s look at Jordan for instance. Jordan
started the renewable energy trend in the
Middle East and North Africa (MENA) region
and was very successful in Rounds 1 and 2 of
its programme. But the grid infrastructure in
the country required upgrading in order for
Round 3 of the programme to be launched
and these led to some delays in the
programme. The grid infrastructure will
need to be looked at in the planning stage in
these emerging markets so as to support
their ambitious programmes.
trMe: solar is a huge advantage. however,
what challenges do you foresee in fulfilling
the goals?
gK: Solar is an important part of the energy
mix and offers an alternative to fossil fuel.
One of the challenges in developing solar in
new markets is the lack of a robust
For rooftop solar to take substantial market
share, government regulators will have to
adopt policies that promote solar energy.
regulatory framework. When solar projects
were first announced in Egypt, there were
concerns about the political and regulatory
risks, and this led to delays and challenges in
closing the Round I projects. With some of
the contractual issues resolved for Round II,
this facilitated some of the projects to
proceed. Another factor is the need for clear
determination from the government to see
through the programme. If you look at the
countries that have been successful in their
renewable programmes, a large factor is
because of the government’s strong will in
setting out targets and following through
with a programme. An example is Dubai,
where clear targets were set and
amendments made to the legislative
framework to facilitate the implementation
of renewable energy projects. There also has
to be some flexibility to take onboard issues
and concerns of developers. The
government has to respond to the feedback
from the market.
For rooftop solar projects, there has to be
clear legislation put in place to enable
private parties/individuals to export power
back to the grid. In most countries in the
Middle East, the only entities that can sell
power to customers are the utilities. To
enable and encourage rooftop solar
projects, the regulatory framework should
be amended or new legislation introduced
to allow for the generation of power by
customers and exporting excess power
to the grid.
Another important aspect is financing.
Lenders would need to be comfortable with
the contractual risk as well as the political
risk of the country. For example, this was
something encountered in Egypt in its Round
I programme with international banks who
had concerns with some of the contractual
risk allocation. To address this concern and
make lenders more comfortable, the
government made some changes in the
contractual documents in the Round II
programme. I think there should be a period
of dialogue between lenders and procurers
Technical Review Middle East - Annual Power Review 2018
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