Seller and buyers’ obligations for electricity have been defined in the final draft of the power purchasing agreement, which Daily News Egypt obtained a copy of.
According to the draft, the electricity seller should design, procure, install, and test the production facility, as well as own it, operate it and maintain it. All electricity generated by the facility would be sold to the governments until the agreement expires.
“The seller will sell all Electricity generated by the Facility to the Buyer (other than Electricity necessary for the Seller to operate the Facility,” the draft read. “At the expiration of the Agreement Term, the Seller will decommission and remove the Facility from the Site in accordance with the usufruct agreement.”
The buyer will receive all electricity delivered to the delivery point and make payments on time.
The government must also “provide reasonable assistance to the Seller to obtain authorisations required in accordance with this Agreement,” the draft added. It clarified, however, that the buyer is not obliged to incur any costs in assisting the seller, or to intervene with any government agency, in connection with any authorisation.
The seller is expected to commence continuous construction activity at the site within 90 days of the date set out in the implementation schedule.
In case of a dispute due to a shortcoming on the buyer’s side, the buyer is required to pay the specified figure within 10 business days after a written demand. The buyer would also be required to pay “interest on the disputed amount at the Late Payment Rate from the date on which the disputed payment was originally due until the date that the disputed amount was paid”.
In September, Minister of Electricity and Renewable Energy Mohamed Shaker explained that the sector aims to reach an electricity capacity of 36,000 MW, to meet the growing demand for electricity. At the time, a Ministry of Electricity source said Shaker met with sector leaders to follow up on the ongoing projects in the fields of production, transmission and distribution.
Energy related agreements were highlighted significantly during the Egypt Economic Development Conference (EEDC) in March. During the conference, several memoranda of understanding (MoUs) were signed between international companies and the Ministry of Electricity.
The New and Renewable Energy Authority also signed a MoU with Alhokair at a total value of $3.5bn. Another agreement was signed with the authority for the construction of solar power plant, with a capacity of 50 MW, as well as an agreement with Naguib Sawiris, representing Orascom, to construct a 50 MW solar energy plant.
