One man’s trash is another man’s treasure — even when it comes to sewage sludge. Companies generating electricity from sewage sludge and sanitary landfills to help power the national grid will now be paid the EGP equivalent of USD 0.44 per kWh as a feed-in tariff, according to a new law issued in the Official Gazette last month. The tariff adjustment was introduced to meet private sector demands for higher rates and to attract more investments into waste-to-energy (WtE) projects, a government source at the Environment Ministry told EnterpriseAM.

By the numbers: The changes raise sanitary landfill-derived feed-in tariffs by 57.1% and sewage sludge feed-in tariffs by 109.5%, based on the EGP’s current value against the greenback.

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The amount paid out will also be pegged to the value of the EGP against the greenback on the day of the invoice, which the producer will get from the distribution arms of the Egyptian Electricity Holding Company (EEHC), providing current and future project operators extra security from potential swings in the foreign exchange rate. The exact rate will follow that published by the Central Bank of Egypt on the day.

On top of that, projects will also be able to get golden licenses and other tax and non-tax incentives, which will stem from the existing investment law, as well as and future amendments to it according to the ministry source.

In recognition of the investment that these projects need, land for these projects will be used under 25-year usufruct agreements. Concerns about distribution companies’ failure to pay producers were also addressed, with a commitment from the EEHC to hold offtakers accountable for any unpaid bills.

SOUND SMART- Electricity is produced from sanitary landfills and sewage sludge by capturing the gas that is released from these sites, which can then be used as fuel to generate electricity. By capturing this gas or burning certain types of waste and using the heat to generate electricity, this doesn’t only reduce the need for more polluting forms of energy, it also prevents polluting gases from decomposition from making their way into the atmosphere.

A total of 36 companies are currently involved in various projects within the WtE system, reflecting the attractive investment environment in the sector, our source told us.

And this list could soon grow, with 84 companies looking to set up WtE projects, including eight projects that are just awaiting their final contracts to be signed, our source told us. The government is also about to sign contracts with eight Egyptian-foreign consortiums to produce 1.7 bn KWh annually of electricity from waste recycling and recycle 3.5 mn tons of waste a year in eight governorates soon, Environment Ministry Advisor for Waste Khaled El Farra told EnterpriseAM. The total targeted investments for the projects combined will reach somewhere between USD 900 mn-1.2 bn and be situated in the governorates of Giza, Alexandria, Gharbia, Beheira, Damietta, Fayoum, Sharqia, and Monufia, according to El Farra.

Who are the local stakeholders in the partnerships? These alliances include companies like Orascom Construction, Hassan Allam Holding, Taqa Arabia, Elsewedy Group, Infinity, Arab Organization for Industrialization, National Authority for Military Production, and Medaf Investments, we were told.

Energy diversification is the name of the game, especially with the country’s rising energy import bill, our source told us. Green energy supplies will also help shield many of the country’s key sectors from the EU’s incoming Carbon Border Adjustment Mechanism — known by its acronym CBAM — particularly in the energy-intensive fertilizer, cement, iron, and aluminum industries.

Your top green economy stories for the week:

  • Yanmu East Logistics Park secured Edge Advanced certification for three of its warehouses, which have reduced energy consumption by 49%, water use by 53%, and embodied carbon by 59%. The HAU Logistics and Kuwait-based global supply chain and infrastructure player Agility JV has three more in-the-works warehouses it believes will also meet the certification criteria. (Statement, pdf)
  • The Red Sea Wind Energy consortium has completed the full commissioning of its 650 MW wind farm in Ras Ghareb, with the final 150 MW phase coming online four months earlier than planned. All units are now connected to the national grid.
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