June 24, 2020

Egypt Sets Waste-to-Energy Tariff

The Egyptian Cabinet has approved the Waste-to-Energy tariff at EGP 1.4/Kwh. The approval was issued by virtue of Decree no. 41 of 2019 (the “Decree“).

Such tariff shall be applicable until reaching the maximum contractual capacity of 300 MW. Thereafter, the Cabinet will reconsider the tariff.

Below a summary of the main provisions of this Decree:

  1. The PPA shall be entered into between the developer and the Governorate in which the plant shall be located for a period of 25 years.
  2. The Governorate will be responsible for the allocation of the land to the developer by way of usufruct for a period equal to the duration of the PPA, after obtaining the approval of the Minister of Local Administration.
  3. The Governorate will be responsible for the supply of waste to the developer’s plant free of charge.
  4. The Governorate shall be responsible for paying the tariff to the developer and then it will re-collect it as following:
    • EGP 1.03/KWh: to be collected from the electricity distribution companies (to which the electricity will be supplied); and
    • EGP 0.37/KWh: to be collected from the Hygiene Fund affiliated to the Governorate.
  5. The tariff shall be paid in EGP according to an equation determined in the annex attached to the Decree. Such equation is connected with USD exchange rate.
  6. The Waste Management Regulatory Authority (“WMRA“), together with EgyptERA, shall be responsible for the technical revision and approval of the project agreements.
  7. WMRA shall have the right to control and supervise the operation of the waste plant throughout the contractual period to ensure the disposal of the waste quantities.
  8. EgyptERA shall determine the regulatory rules and technical requirements for the connection of the plant to the electricity grids.
  9. The maximum capacity of waste plant shall be 20 MW in order to be connected to the medium voltage grid at 22KV.
    For more information or questions, please contact Dr. Fatma Salah and Heba Elkady.

R&R Energy Experience

Riad & Riad energy and project finance team has extensive experience in both local and cross-border finance transactions. We act on behalf of developers, borrowers and financiers in various industrial sectors including renewable energy and infrastructure projects.

R&R is currently advising Saudi’s Fas Energy in relation to its Waste-to-Energy (WtE) project with the New Urban Communities Authority (NUCA). The project involves the development of WtE facility in the 10th of Ramadan City with investments exceeding USD 500 million and a capacity of 100 MW. Our team has also drafted the (i) Framework agreement with NUCA (on a BOT scheme) covering the usufruct of the land and the supply of wastes, (ii) PPA with EETC and the (iii) Sovereign guarantee with MOF

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