Egypt has an installed power capacity of 32 GW. 88% of Egypt’s energy mix is provided by thermal power plants, while hydropower only accounts for 10% of the capacity and wind energy 2%. Given the country’s significant wind and solar potential, in 2008, the authorities set ambitious objectives for renewable energy development. The ratio of electricity produced from renewable energy sources in the domestic energy mix is expected to reach over 20% by 2020. The reform which has been ongoing in the energy sector since 2012, includes :
- the reduction of energy subsidies
- and the implementation of a feed-in tariff for renewable energies. It should contribute to shaping a conducive regulatory environment and to enhancing the attractiveness of solar and wind energy generation for investors.
The west coast of the Red Sea holds exceptional wind potential, due in particular to the average wind speed which exceeds 10 m/s. The Egyptian authorities plan to develop both private and public investments in wind energy there with the New and Renewable Energy Authority (NREA). NREA has asked European donors, for which KfW is the lead for this project, to study the feasibility of, then finance, a 200 MW wind farm connected to the domestic power grid. AFD has allocated a EUR 50m loan to finance the project, in addition to the KfW, EIB and EU contributions and the Egyptian Government’s contribution. The fact that the project site is a route for species of migratory birds in the spring and autumn requires the implementation of a rigorous environmental management plan, which will be monitored by NREA, working closely with the teams of the Egyptian Environmental Affairs Agency (EEAA).
The project contributes to supporting the sustainable growth of Egypt’s economy. The climate impacts expected from this project should also be highlighted: The increase in renewable energy power generation by some 700 GWh a year. The annual reduction of carbon emissions by 300,000 tons. The contribution to the preparation of investments in renewable energies by private developers in the Gulf of Suez area. The contribution to strengthening local technical skills in the field of renewable energies.
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