Egypt demands lower price/kWh for 2 GW of Siemens wind - report

Egypt has asked Siemens AG (ETR:SIE) to find a way to lower the proposed power price for 2 GW of wind projects in the country, Daily News Egypt reports, citing informed source.

The German company has offered to sell power from the 12 wind power plants at EUR 0.053 per kWh (USD 0.059). The Ministry of Electricity sees that as too high a price, especially given the financial situation of the potential off-taker -- the Egyptian Electricity Transmission Company (EETC), the daily said.

The ministry in 2016 agreed, after a tender, to purchase power at about USD 0.047 (EUR 0.042) per kWh for 25 years from the 250-MW Gulf of Suez wind farm that is to be built by Toyota (TYO:7203), Orascom and GD France. According to the Daily News report, Egypt wants a similar price for Siemens’ projects.

Other projects may be forced to reduce the power purchase rates if they want to continue negotiations with EETC, the sources have said.

Siemens signed contracts to install up to 2 GW of wind farms and build a blade manufacturing facility in Egypt in mid-2015. The wind projects are planned for the Gulf of Suez and West Nile areas, while the capacity of the blade factory was expected to be around 340 MW.

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