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Algeria: The Algerian Council of Ministers has approved two new tenders for the deployment of 200 MW of solar that may be released in the coming weeks

  • United Kingdom
  • Energy and infrastructure

21-06-2018

200 MW of Solar

Further to the announcement made in April 2018 by the Algerian Minister of Energy, Mustapha Guitoni, the Algerian Council of Ministers has approved two new tenders for the deployment of 200 MW of solar that may be issued over the coming weeks.

According to a Government-owned news portal, Portail Algerien des Energies Renouvelables, of the planned 200 MW, roughly 150 MW will be tendered in the frame of an international call to bidders, to which local private and public entities will be entitled to participate in consortia with foreign players, while another 50 MW will be assigned to Sonegaz, a local state-owned power and gas utility for off-grid hybrid gas/diesel and solar projects.

We suspect that the first of the two tenders will select IPP solar projects with a power range of 5 MW to 10 MW, will be across 15 preselected sites in different regions, with selected developers being granted a PPA for a 20 to 25 year term.

The second tender, will select off-grid hybrid gas/diesel and solar projects that are aimed at lowering power prices in non-interconnected areas in the south of Algeria.

The deployment of 200 MW of solar is part of the country's plan to deploy 22 GW of renewable energy power generation capacity by 2030, including 13 GW of PV.

Key Challenges

We suspect that the following key challenges may arise for international bidders:

  1. PPA - previous iterations would be unbankable by international financing standard, with onerous terms that are unlikely to offer sufficient protections to lenders;
  2. High local content requirement - we suspect that a high local content is likely to take the form of locally made components, manifesting in a higher cost to the project;
  3. Local ownership requirement - onshore entities require a majority stake to be held locally; and
  4. Foreign exchange controls - although international bidders will be able to remit, convert and transfer funds, the process is bureaucratic, susceptible to government interference and can take anywhere between three to six months.

If you would like to discuss the above, any other clean energy opportunities in Algeria, or the wider market please contact the team below.

For more information contact

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