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The Egyptian Ministry of Electricity and Energy has announced feed-in tariffs for electricity generated by solar and wind sources as part of the government’s efforts to increase the country’s energy capacity in the face of serious power shortages and recent power outages.

Minister of Electricity and Energy Mohamed Shaker said in a press conference on Saturday that the purpose of the feed-in tariff was to encourage private investment in renewables due to limited resources from conventional sources of fuel, according to Egyptian news website Ahram Online.

The feed-in rates will vary depending on usage. Households will receive EGP 0.848 ($0.118) per kilowatt hour (kWh), commercial producers EGP 0.901 (under 200 kW) and EGP 0.973 for producers of 200 kW to 500 kW.

Tariff rates for large-scale projects will be calculated in U.S. dollars because they will likely be developed with foreign financing, Ahram Online reported, adding that projects between 500 kW and 20 MW will receive $0.136 per kWh and those producing 20 MW to 50 MW will be entitled to $0.1434 per kWh.
The tariffs will be paid in domestic currency according to the exchange rate at the time of payment.

While the government has set a production cap of 50 MW for each project, the cabinet will be able to consider requests for production increases. Tariffs will be reviewed regularly as the cost of renewable energy production is expected to decrease, the minister said.

Al Jazeera reported earlier this month that Egyptian President Abdel Fattah el-Sisi had blamed widespread power outages on years of insufficient investment, adding that the country need to invest at least $12 billion over the next five years in order to meet the electricity demands of the population.

According to Daily News Egypt, the government is aiming to generate up to 2.3 GW through solar power, although no timeline has been set for implementation. In addition, Shaker said the government planned to contract for 2 GW of wind energy.

The government is also preparing a law that would allow for state-owned lands to be made available for renewable energy projects in exchange for 2% of the energy produced, Daily News Egypt reported.

The government has a new and renewable energy target of 20% by 2020.

Last week the Egyptian embassy in Germany, in cooperation with the Arab-German Chamber of Commerce and Industry and the German Renewable Energy Federation (BEE), hosted a conference -- Renewable Energy in Egypt: The Way Forward -- that offered a look at the country's current solar and wind sector and the legal and financial framework for energy projects in Egypt.