Electricity Ministry demands Toyota alliance’s acceptance of placing arbitration in Cairo to finalise Suez Gulf wind farm

Mohamed Farag
3 Min Read

The Ministry of Electricity called on the Toyota, Orascom, and GD France alliance—chosen to carry out the Suez Gulf wind farm—to accept that arbitration in case of dispute will be held in Egypt, in order to complete the contract.

Sources at the Ministry of Electricity said that negotiations are underway to finalise the contract by placing arbitration in case of dispute in Cairo, which was rejected by the alliance. It demanded arbitration to take place outside of Egypt. Despite the Ministry of Finance’s approval to guarantee the project, the item related to arbitration in case of dispute stands in the way of the final signing.

The state will provide official pledges as a financial guarantee to investors in order to ensure that the government is responsible for reimbursing the companies if the Ministry of Electricity fails to repay them, and for projects posed by the government and carried out by the private sector.

The sources added that the Egyptian Electricity Transmission Company (EETC) wishes to finalise agreements and sign contracts during the first quarter of 2017 in order to start implementing the project.

The Ministry of Electricity had negotiated with the alliance after the final agreement with the alliance of Akila and Actis companies stumbled. The alliance had offered the lowest prices, but had not completed the procedures and requirements announced by the ministry.

A source from the Toyota alliance said that the alliance adheres to amend the item of arbitration in case of dispute to be in Egypt, based on the request made by the financing parties.

Lamia Youssef, head of the feed-in tariff department at EETC, had told Daily News Egypt in previous statements that the Ministry of Electricity will contract with the Toyota alliance to purchase the produced kilowatt for 4.7 cents.

She added that the Ministry of Electricity will buy the produced energy from the plant for 25 years at a price that will be agreed upon, in accordance with the offer presented in the tender. The produced energy will be sold to distribution companies.

The Ministry of Electricity seeks to produce 20% of new and renewable energy of the total production of the national electricity grid by 2020, as part of the ministry’s plan to diversify its energy production sources and to achieve sustainable development in the sector.

It announced that the contract will not be directly signed with any company to inaugurate electricity production plants from renewable sources, but the company will offer competitive bids to be contracted at the lowest prices.

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