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Egypt’s Electricity Minister Muhammad Shakir has backed down in accepting that contracts for renewables projects to be developed under feed-in-tariffs will be revised to enable international arbitration in settling contractual disputes.
While this will increase the likelihood of potential investors being able to raise finance to develop projects under Egypt’s 4.3GW wind and solar PV program, he has also reduced the attractiveness of solar projects by cutting electricity purchase prices.
The Ministry of Electricity had decided that developers must raise 85% of their project finance from international institutions, as well as 15% from Egyptian banks. However the previous insistence on Egyptian arbitration meant international banks declined to provide funding and foreign partners threatened to withdraw (MEES, 26 August).
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