Lekela Power is a 60/40 joint venture between Actis and Mainstream Renewable. The joint venture has already taken possession of the project land in Aswan and is preparing for site works and studies. It will be taking possession of the wind site in the West Gulf of Suez shortly.
Both projects belong to the Egyptian government's IPP/BOO (Build-Own-Operate) programme, a feed-in tariff scheme combined with power purchase agreements (PPAs).
The Egyptian Electricity Transmission Company (EETC) agrees to purchase the power generated over a period of 25 years for photovoltaics and 20 years for wind, respectively.
Chris Antonopoulos, CEO of Lekela Power, has commented:
"We are pleased with the two MOUs, which mark an important step for Lekela Power and its partners. We have a long-term strategic plan to deliver renewable energy in Egypt; and a great ambition to continue to grow a significant presence in the market. Egypt's abundance of natural resources set the perfect parameters for entering into renewable energy; and presents a strategic solution to the country's pressing energy demands."
The Managing Director of Onshore Procurement, Construction and Operations at Mainstream Renewable Power, Barry Lynch, stated:
Lekela Power has additional projects in the pipeline in Egypt, mainly a 250 MW wind power plant in Gabal Elzeit (under the IPP/BOO programme), for which Lekela has submitted the lowest overall tariff of US$3.961 cents per kWh.With US$1.9 billion worth of investments planned for Africa, Lekela Power's projects are expected to generate up to 1,000 MW of renewable energy in the continent over the next five years.
"These wind and solar projects meet three important criteria in terms of addressing Egypt's growing electricity demand. They can be delivered at the scale and the speed required, as well as at a price which is cheaper than new thermal generation."
Egypt's Supreme Energy Council introduced the IPP/BOO programme in 2008 in order to diversify the country's energy portfolio, 95% of which was based on oil & natural gas. The plan includes a target of 12% of total power generation from wind energy by the year 2020.An additional 7,200 MW of wind power is planned, 3,000 MW of which will be installed in the Gulf of Suez (1,250 MW to be constructed by the private sector). The power generated in the Gulf of Suez will feed into the northern grid through a new 280 km 500 kV transmission line to be financed by the World Bank and EU. Total investment cost for the power line is estimated at US$299.7 million.