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Cairo Renews Interest in Renewable Energy

December 19, 2016

A picture taken on March 13, 2016 shows a general view of Egypt's High Dam in Aswan, some 900 kilometres south of Cairo. / AFP / KHALED DESOUKI
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Alternative energy companies are optimistic that sustainable power finally has a chance of gaining traction in Egypt.

CAIRO: The Egyptian government is working to secure a share of a $5.8 billion World Bank program for renewable energy to finance scores of solar, wind, and biomass power initiatives. It is also seeking additional funds from the African Development Bank and European Bank for Reconstruction and Development for the same purpose.

“The prospect of tapping into these funds is motivating the government to start moving again on renewables,” Ahmed Zahran, CEO of KarmSolar, a Cairo-based firm specializing in off-grid solar power, told The Media Line.

The renewables community here spent much of 2016 adrift and alienated from policymakers.

“It took so long to get project documents from the government and when the documents came in, they gave us less than a week for review,” said  Sherife Abdel Messih, chief executive of the Future Energy Corporation, a designer and installer of renewable micro generation systems, that is working on projects in the Middle East and Latin America. “The whole thing was run completely unprofessionally.”

A plummeting local currency upended agreements with prospective alternative energy providers over feed-in tariff pricing – the amount of money sustainable providers receive for adding energy to the conventional electricity grid.

Additionally, the heavy emphasis set on megaprojects by President Abdel Fattah Sisi’s administration – including negotiations with the Russian government to build a nuclear power plant on the Mediterranean and speeding up completion for the 4.4 gigawatt gas-fired power station in southern Egypt, being built by Siemens of Germany – left entrepreneurs in the renewables sector feeling left out in the cold.

But this week a consortium of 30 international and Egyptian banks announced they were ready to finance new renewable projects to the tune of €2.84 billion.

A specific plan to raise the feed-in tariff for biomass energy from 0.92 Egyptian pounds (5 US cents) per kilowatt per hour to 1.08 pounds is good news for companies like Cairo’s Chemonics that want to build plants to convert human and animal waste into fuel.

“Egypt has 10 million more people than Germany, and yet we have only one biomass plant to turn this waste into fuel while they have seven,” Chemonics CEO Ahmed Gaber told an audience of clean energy entrepreneurs at Cairo’s RiseUp Summit, the largest annual event for innovators and investors in the Middle East and North Africa.

“We have suffered from a lack of strategic vision from the government, especially when it comes to looking holistically at the relationship between our water and power problems,” Gaber said.

An estimated 97 percent of the country’s water for household and agricultural use comes from the Nile, and it has been decades since the 1960s-era High Dam at Aswan met more than 15 percent of Egypt’s electricity needs.

The RiseUp symposium featured entrepreneurs connecting the dots between water and power with new technologies and business models.

KarmSolar has moved to deploy its off-grid projects to build high capacity solar pumping stations to irrigate infertile land with water from yet untapped aquifers. In the process, the company has aligned itself with Sisi’s plans to put 3.7 million acres of desert sand into agricultural use.

“With projects like the 1.5 million feddan (acre) reclamation of desert land, and the reduction of subsidies on conventional energy sources, solar pumping will come in very high demand in the next three to five years,” said Randa Fahmy head of research and development at KarmSolar.

Solar startups such as Suncity are aiming to bring renewable powered irrigation to the five million small farmers cultivating Nile Valley plots of one acre or less.

The company’s founder Ahmed Abbas has developed a portable solar powered water pump that groups of farmers can buy and share collectively.

“In this business it’s all about two things – the product and the financing,” Abbas told The Media Line. “We are hoping that new players get access to these funds being set up by international lenders.”

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