Legal note: Egypt Waste-to-Energy tariff
Riad & Riad provide an overview of the key provisions of Egypt's Waste-to-Energy (WTE) feed-in-tariff (FIT), which was approved by decree in December 2019. In May, Egypt's Ministry of Environment invited firms to submit expressions of interest (EOI) to develop WTE projects under the FIT programme.
The Egyptian Cabinet has approved the Waste-to-Energy (WTE) tariff at EGP 1.4/Kwh. The approval was issued in December 2019 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.
Summary of the main provisions of this Decree:
- 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.
- 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.
- The Governorate will be responsible for the supply of waste to the developer’s plant free of charge.
- 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.
- 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.
- The Waste Management Regulatory Authority ("WMRA"), together with EgyptERA, shall be responsible for the technical revision and approval of the project agreements.
- 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.
- EgyptERA shall determine the regulatory rules and technical requirements for the connection of the plant to the electricity grids.
- The maximum capacity of waste plant shall be 20 MW in order to be connected to the medium voltage grid at 22KV. Whereas, the minimum capacity of such waste plant shall be 500 KW.
- The Decree also establishes a committee, headed by the Minister of Environment, to be responsible for setting out the technical and financial contractual requirements for WTE projects and carrying out the technical assessment of the operating projects in this field.
WMRA Request for Expression of Interest for WTE Projects
The Ministry of Environment published on its official website the announcement notice made by WMRA for the Expression of Interest (EoI) for WTE Projects. The Ministry has also published an “Executive Guidelines for Investment in WTE” and the “Prequalification Document” required from the service providers.
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Riad & Riad 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. |
If you have any questions regarding this paper, feel free to contact:
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Dr. Fatma Salah Partner Tel: +202 37488521 Email: [email protected]
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Heba Elkady Senior Associate Tel: +202 37488521 Email: [email protected] |
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