On September 3, 2016 the United States and China, who are estimated to be responsible for 30 percent of the world’s carbon emissions, ratified the Paris Agreement reached at COP21. Such a commitment by the world’s two largest economies to reduce carbon emissions will only increase the political pressure on other countries to follow suit, which in turn should lead to an increase in renewable projects. In this second instalment of Winston’s META Monthly: Renewables Update we highlight major wind, waste-to-energy, and hydropower projects that are imminent in the Middle East, North Africa, and Turkey. Our next edition will cover solar in the Middle East
Wind, Waste-to-Energy, and Hydropower Opportunities
600MW-1GW of Wind Power by 2020: The Kingdom of Jordan is planning for renewable sources to constitute 10 percent of the country’s energy supply by 2020, of which 600MW-1GW is expected will come from wind. To date more than 315MW of wind capacity is under development in Jordan.
82MW Al Rajef Wind Farm: Dubai-based company Alcazar Energy is developing a 82MW wind farm under a build, own, operate (BOO) model at Al Rajef. A number of lenders, including the EBRD, French Development Agency subsidiary, Proparco, and a subsidiary of KfW, DEG, are considering financing the project. Financial close is expected to occur in October 2016.
50MW Daehan Wind Farm: Korea Southern Power Company and Daelim Energy have formed a 50:50 joint venture in order to develop a 50MW wind farm in Tafila under a BOO model. The IFC and Islamic Development Bank are expected to provide debt for the project. The financing is anticipated to be signed towards the end of 2016.
89MW Al Fujeij Wind Farm: An 89MW wind farm is being developed by Korea Electric Power Corporation under a BOO model in Fujeij. Danish company Vestas will supply the turbines. The Export-Import Bank of Korea is expected to provide part of the financing.
2000MW of Wind Power by 2020: Morocco has set an ambitious target of 42 percent of power generation to come from renewable sources by 2020 with this figure raising to 50 percent by 2030. This is expected to comprise a total wind power capacity of about 2,000MW by 2020. The first phase of Morocco’s Integrated Programme for Wind Energy launched in 2010, and included a 150MW wind farm at Taza, which is being developed by EDF, Mitsui, and Alstom and is due to be commissioned in 2017.
In addition, the 120MW Khalladi wind project, which is being developed by ACWA Power and funded by the EBRD and Banque Marocaine du Commerce Extérieur reached financial close in November 2015.
850MW Wind Power Programme: In March 2016, Morocco’s Office National de l’Electricité et de l’Eau Potable (ONEE) selected a consortium of Enel Green Power, local Nareva Holding, and Siemens to develop the second phase of Morocco’s Integrated Programme for Wind Energy comprising five wind farms with a total capacity of 850MW. The US$1.1 billion project will be split over five separate sites: Tangier II (Tangier; 100MW); Tiskrad (Laayoune; 300MW); Boujdour (Boujdour; 100MW); Midelt (Midelt; 150MW) and Jbel Lahdid (Essaouira; 200MW). Three of the wind developments are expected to be financed with debt from the European Investment Bank, KfW, and the African Development Bank. The other two projects are expected to be financed by Moroccan banks.
7,000MW of Wind Power by 2020: Egypt is planning for wind power to provide more than 7,000MW of electricity by 2020 as part of its ambitious renewable energy targets.
Challenges for Round 1 of Egypt’s Renewables Programme: Raising international finance for round one of Egypt’s renewable programme (2,000MW of solar and 2,000MW of wind) has become increasingly difficult as a result of the Egyptian government’s decision to deny international arbitration for these projects and limited currency convertibility. In addition, reports suggest that sponsors have been stopped from raising US dollars from local Egyptian banks, due to the shortage of US dollars within Egypt. This has led to a number of sponsors dropping out and it has also meant that the remaining sponsors are looking towards ECAs to assist with development costs. The deadline for achieving financial close of these projects is October 27, 2016.
Round 2 of Egypt’s Renewables Programme: Round 2 of Egypt’s renewable programme (4,300MW of solar and wind) was launched earlier this month, with significantly reduced feed-in tariffs for both solar and wind. The round two tender attempts to address the issue encountered during round one with respect to international arbitration, by providing that domestic arbitration will apply in the first instance, but sponsors will have the right to appeal domestic decisions before an international seat. However, it appears that currency convertibility will remain a potential issue, as the government so far is unwilling to provide any guarantee. The deadline for achieving financial close of these projects is October 28, 2017.
250MW Gulf of Suez IPP Wind Farm: A consortium comprising Engie, Toyota Tsusho, and Orascom Construction was selected to develop the 250MW Gulf of Suez onshore wind project and signed a PPA with the Ministry of Electricity earlier this year. Financing for the US$400 million project is expected to come from JBIC, Societé Génerale, and SMBC backed by a Nexi guarantee.
250MW Lekela Power Gulf of Suez Wind Farm: Lekela Power, a 60:40 joint venture between Actis and Mainstream Renewable Power, is in the process of developing this US$350 million wind project on a BOO basis.
250MW West Nile Wind Project: Sixteen groups of bidders have been recently prequalified by Egypt’s New & Renewable Energy Authority (NREA) for a 250MW wind project which will be located in the West Nile area. They include, among others, Masdar, EDF, ACWA Power, and Alcazar Energy.
United Arab Emirates
Waste-to-Energy Initiatives: A number of the Emirates are looking to implement waste-to-energy projects, in line with the UAE Vision 2021, which targets diverting waste from landfills by 75 percent by 2021.
Warsan Waste-to-Energy Project: The Dubai Municipality recently invited prequalified contractors to submit proposals for the EPC contract to build the Warsan waste-to-energy project in the Emirate of Dubai. The deadline for submission of proposals is October 2, 2016. The first phase of the project is expected to have a minimum capacity of 2,000 tonnes a day.
Kabd Waste-to-Energy Project: Three bids have been submitted in response to the Kuwait Authority for Partnership Projects request for proposals issued in November 2015 to develop the Kabd solid waste project under a design, build, finance, operate, and transfer model. Amongst the bidders are French developers Suez Environment and CNIM, Austrian developer EVN Group, and Japanese developer Itochu. The project is expected to have an initial capacity of 3,275 tonnes a day.
2,000MW of renewable capacity: Jordan’s National Energy Strategy has set a target of 2,000MW of renewable power capacity by 2020. The first round of PV solar projects have already concluded, with the second round consisting of three 50MW PV projects scheduled for financial close in September 2016.
20,000MW of Wind Power by 2023: Turkey has set an ambitious target to increase its installed capacity from 74GW to 120GW by 2023. It is expect that a total of 30 percent of the country’s installed capacity will come from renewable sources, of which 20,000MW will come from wind power. In order to achieve its 2023 target, it is estimated that Turkey will require US$110 billion of investment—more than double the total amount invested during the last decade.
99.5MW Hydropower Plant: Czech developer Energo-Pro has reached an agreement with Turkey’s Ministry of Foreign Affairs to build a 99.5MW hydropower plant in the Erzurum province in north-east Turkey. The US$240 million project is to be financed by Turkey’s Akbank with a US$166 million loan. It is expected that the plant will begin operations in 2019 and will benefit from the government feed-in tariff (equal to US$73 per MWh) for 10 years.