Projects

General government authorisation

What government authorisations must investors or owners obtain prior to constructing or directly or indirectly transferring or acquiring a renewable energy project?

Electricity generation projects, including from renewable sources, must be established in the form of an Egyptian joint stock company, to be authorised by the General Authority for Investment and Free Zones, affiliated to the Ministry of Investment and International cooperation. The companies must then obtain a licence from EgyptERA for power generation, and a building permit for the construction of any concrete or fixed installations. An environmental impact assessment, approved by the EEAA, is also required. The generation licence and approval of the EEAA must be maintained valid and effective for the entire duration of the project. The transfer of renewable energy projects requires an assignment of the generation licence issued by EgyptERA, in accordance with the route traced by the Electricity Law and its Executive Regulations to this effect.

Offtake arrangements

What type of offtake arrangements are available and typically used for utility-scale renewables projects?

EETC is the typical offtaker for utility-scale renewable energy projects in Egypt. Given that its credit rating is not positive, lenders typically require a sovereign guarantee to be issued by the Egyptian Ministry of Finance to guarantee the payment obligations of EETC under the power purchase agreements it enters into as offtaker.

Procurement of offtaker agreements

How are long-term power purchase agreements procured by the offtakers in your jurisdiction? Are they the subject of feed-in tariffs, the subject of multi-project competitive tenders, or are they typically developed through the submission of unsolicited tenders?

Unsolicited tenders are currently not applicable in the renewable energy sector in Egypt. However, competitive bids are from time to time launched by NREA or EETC for the development of electricity generationprojects from renewable sources. There is also a FIT programme currently in place.

Operational authorisation

What government authorisations are required to operate a renewable energy project and sell electricity from renewable energy projects?

See question 24.

Decommissioning

Are there legal requirements for the decommissioning of renewable energy projects? Must these requirements be funded by a sinking fund or through other credit enhancements during the operational phase of a renewable energy project?

The obligation to decommission renewable energy projects is contractual. The model power purchase agreements developed by EETC and typically used thereby in the projects where it acts as the offtaker, as well as usufruct agreements whereby NREA acts as lessor of land for renewable energy projects, contain decommissioning requirements.