The objective of the project is to remove the barriers to increased power generation by small, decentralized, grid-connected PV systems implemented by households and small- and medium-size enterprises. The project strategy builds on the planned Government initiatives to develop a market for small, decentralized renewable energy power generation by ensuring adequate returns on targeted private sector investments. The project has been financed by the Global Environment Facility (GEF) and United Nations Development Programme (UNDP) acts as the GEF Implementing Agency. The project was executed by Industrial Modernization Centre (IMC) of the Ministry of Industry and Foreign Trade, which will assume the overall responsibility for the achievement of project results as UNDP’s Implementing Partner (IP).
The project will catalyze the development of decentralized, grid-connected small-scale renewable energy (RE) power generation market in Egypt and the solar PV in particular. The target is to facilitate the installation of new decentralized private PV, resulting in direct GHG reduction. Complementary indirect mitigation benefits are expected from the sustained market growth of the PV market after the project with estimated GHG reduction at least 0.6-0.7 million tonnes of CO2eq.
By the end of the project, the project seeks to establish a basis for sustainable market growth by:
- Supporting the design, purchase and installation of the first PV systems as an easily replicable model;
- Establishing an enabling policy and institutional and regulatory framework to provide the basis for sustainable market growth of small, decentralized RE (primarily PV) applications and for attracting adequate financing for the required investments;
- Strengthening the supply chain by building the capacity of the key supply-side stakeholders such as system designers, equipment vendors and installers to offer competitively-priced, good-quality products and services to the targeted stakeholders (including required after-sales services) and by introducing adequate quality control mechanisms to build up customer confidence and positive customer experiences of small, decentralized PV systems;
- Facilitating the establishment of a financing framework and a network of local financial institutions to support the development of the decentralized PV market by providing long-term financing on attractive terms for PV investments and, as applicable, dedicated funds especially for those households which, without a previous credit history and/or required collateral, may face difficulties in convincing the banks of their credit-worthiness.
The UNDP-implemented, GEF-financed project has the potential to drive a major transformation in the small, decentralized renewable energy power generation market in Egypt, specifically contributing to the following:
- Allowing Egypt to scale-up the supply of electricity to meet ever-growing demand without burdening the State with additional subsidy payments and the need to invest in large power plants, while also contributing (although still at a relatively modest level) to the Government’s target of having 20% of all power generation produced by renewable energy sources by 2020;
- Establishing a premium price for the sale of power from decentralized rooftop PV systems to serve as a precursor and powerful proof-of-concept for a feed-in tariff;
- Creating a cadre of stakeholders who profit from renewable energy and have an interest in promoting it;
- Involving individuals and households in their own power generation, when today they are only consumers.
- Strengthening a base of skilled PV technicians;
- Strengthening a supply chain for PV system components; and
- Working with local financial institutions to increase the available financing for small- and medium-size renewable energy projects.