Higher tariffs for waste-to-energy projects are in the works: The government is in discussions with the private sector to finalize studies on setting a more profitable feed-in tariff rate — the set price that the government pays for the electricity projects generate — for its initial phase of waste-to-energy (WtE) projects, a government source told EnterpriseAM. The new tariffs aim to ensure a good return on investment for companies currently making investments in the sector.

Remember: We heard in August that the Madbouly government was planning to sign contracts with eight Egyptian-foreign consortiums to produce 1.7 bn kWh annually as part of the first phase of Egypt’s WtE push. The contracts were expected to be signed once the cabinet had greenlighted the new tariff rate, which had preliminarily been set at around EGP 2.35 kWh — a significant increase from EGP 1.40 kWh currently.

Keeping the price tag flexible: The previously proposed tariff of EGP 2.35 per kWh is not final, our source said, adding that an over 60% increase from the current rate could be on the table. The tariffs will be denominated in USD but paid in EGP at the Central Bank of Egypt exchange rate, with the revised tariff linked to future exchange rate fluctuations to ensure solid investment returns, the source noted.

The timeline: The draft is currently in the hands of the cabinet, according to the source, who added that the final tariff will be announced within two months.

Who’s paying? The tariff — which has remained unchanged since 2019 — will be split between the electricity, environment, local development, and finance ministries, with the Finance Ministry expected to help the Electricity Ministry cover the cost increase.

The new tariff adjustment is part of a wider package of regulations drafted by the Waste Management Regulatory Authority (WMRA) aimed at encouraging private sector players to invest in WtE projects, Al Arabiya reports. Among these are incentives like the golden license and full access to tax and non-tax benefits under the new Investment Act, our source told us.

The gov’t has enough project proposals for now: No new bids for WtE projects will be invited for the time being, as the government has already received 54 proposals for future phases after the launch of phase one, our source noted.

Land for the projects is ready to go: All required land has been allocated and is awaiting final approval from the cabinet to proceed with the incentives package, the source told us.

The projects aim to recycle 3.5 mn tons of waste annually to produce electricity, with local authorities tasked with supplying and collecting waste for the companies. The first phase will span eight governorates — Giza, Alexandria, Gharbia, Beheira, Damietta, Fayoum, Sharqia, and Menoufia — with total investments ranging between USD 900 mn and USD 1.2 bn. Commercial production is expected to begin within two years of signing the contracts.

The players: The eight consortia that will make up phase one of the WtE push include Orascom Construction, Hassan Allam Holding, Taqa Arabia, Elsewedy Electric, Infinity Power, the Arab Organization for Industrialization, the National Organization for Military Production, and Medaf Holding, WMRA consultant Khaled El Elfarra previously told EnterpriseAM. These companies have partnered with international investors in line with government directives to drive foreign direct investment to the sector.

Not the only players jumping on the WtE train: Cemex signed an agreement with Minya Governorate last month for the management and operation of a EGP 90 mn waste-to-energy (WtE) facility in Tuna El Gabal in Minya — its third WtE project signed in Egypt in 2024.

Sound familiar? The government has long tried to encourage investment in the WtE sector, which faces stiff competition from solar and wind power for investment. Previous initiatives have seen the government raise tariff rates and target the sector with additional incentives to bridge the gap.

Your top green economy stories for the week:

  • An Engie-led consortium including Orascom Construction, Japan’s Toyota Tsusho, and Eurus Energy will build a 1 GW wind project in Egypt by 2028. The news comes after 306 MW of a 650 MW wind farm in Ras Ghareb built by the consortium came online earlier this month.
  • MPs signed off on a EUR 135 mn grant from the European Investment Bank to support the Environment Ministry’s Sustainable Green Industry project, which will support the greening of the country's industrial sector by implementing climate change and environmental sustainability measures.
  • Mashreq finished their clean-up of three designated zones in Wadi Degla Protectorate, as part of Mashreq’s wider Climb2Change global ESG initiative focused on sustainability-linked financing and environmental preservation
  • Misr Beni Suef Cement will build an EGP 298 mn solar project with China’s Huawei, solar module manufacturer Jinko Solar, and local company Integrated Renewable & Sustainable Communities.
Tags: