Giant solar park in the desert jump starts Egypt’s renewables push

Electric sun cells face the sun at a solar power of the Benban plant in Aswan, Egypt, November 17, 2019. Picture taken November 17, 2019. (Reuters)
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Updated 17 December 2019

Giant solar park in the desert jump starts Egypt’s renewables push

  • Plant is one of world’s largest at nearly 1.5 GW
  • Egypt has 20% renewables target by 2022

ASWAN: Near the southern Egyptian city of Aswan, a swathe of photovoltaic solar panels spreads over an area of desert so large it is clearly visible from space.
They are part of the Benban plant, one of the world’s largest solar parks following completion last month of a second phase of the estimated $2.1 billion development project.
Designed to anchor a renewable energy sector by attracting foreign and domestic private-sector developers and financial backers, the plant now provides nearly 1.5 GW to Egypt’s national grid and has brought down the price of solar energy at a time when the government is phasing out electricity subsidies.
In 2013, Egypt was suffering rolling blackouts due to power shortages at aging power stations. Three gigantic gas-powered stations with a capacity of 14.4 GW procured from Siemens in 2015 turned the deficit into a surplus.
National installed electricity capacity is now around 50 GW and Egypt aims to increase the share of electricity provided by renewables from a fraction currently to 20% by 2022 and 42% by 2035.
“They have plans to bring out renewable energy, private sector invested, across the Red Sea in wind and throughout the deserts for solar power,” said Christopher Cantelmi of the International Finance Corporation (IFC), a lead backer of Benban along with the European Bank for Reconstruction and Development.
The Benban project’s 32 plots were developed by more than 30 companies from 12 countries, including Spain’s Acciona, UAE-based Alcazar Energy, Italy’s Enerray, France’s Total Enren and EDF, China’s Chint Solar and Norway’s Scatec. Developers of the plant, around 40 km (25 miles) northwest of Aswan, are guaranteed a feed-in tariff price for 25 years.
“It really introduced a lot of them to Egypt for the very first time, to project finance and to infrastructure finance,” said Cantelmi.
A third phase at Benban could add more than 300 MW, though nothing has been decided yet, while another large scale solar development is planned 45 km north of Aswan at Kom Ombo.
Egypt has struggled to attract foreign investment outside the oil and gas sector, despite winning praise for an IMF-backed economic reform program since 2016.
At Benban, developers visited by an IFC team last month raised the issue of a stand-off over a government demand that they collectively pay an extra 1.9 billion Egyptian pounds ($118 million)in infrastructure costs. There had also been some curtailment of supplies to the grid as they waited for new transmission lines to be added.
But operations were generally going well, and the Egyptian Electricity Transmission Company was paying on time, they said.

BRUSHING MACHINES
Solar irradiation is exceptionally good at Benban and running costs are low, developers say. Upkeep is largely limited to brushing the desert dust from the panels to maximize absorption.
“You don’t need a lot of manpower round here, you only need cleaning machines ... and maintenance, which is not a big amount of people,” said Mohamed Ossama, project head for Egypt’s Taqa Arabia, which has a 50 MW plot.
Benban has brought down the price of solar energy, drawn in dozens of companies, and given Egypt’s south an economic boost, said Mohamed Orabi, professor of power electronics at Aswan University.
However, the plant needed a storage system — still a key technological challenge for solar power that surges during the daytime — in order to stabilize supplies to the grid, he said.
Last year a report from the International Renewable Energy Agency (IRENA) suggested Egypt could be more ambitious in its green energy goals and aim to supply 53% of its electricity from renewables by 2030.
But it said developers could be discouraged by complex administrative procedures, and urged Egypt to review its market framework and develop local manufacturing capacity for renewables.
“The (Benban) project showcases Egypt’s seriousness in doing renewable energy business, especially when most countries in the region have been stalling on this front, with the exception of Jordan and Morocco,” said Jessica Obeid, an energy expert at Chatham House.
“In the next stages, political and policy stability are important, reduction of the complex bureaucratic measures and clear assignments of institutions’ mandates and facilitation of the process will be much needed.”


Japan’s NTT to spend $38 billion to buy out, take DoCoMo private

Updated 29 September 2020

Japan’s NTT to spend $38 billion to buy out, take DoCoMo private

  • Move is intended to enhance the competitiveness of the NTT group as it consolidates its services

MITO, Japan: Japanese telecoms giant Nippon Telegraph & Telephone, or NTT, announced Tuesday it will spend $38 billion to buy out and take private its mobile unit NTT DoCoMo in one of the largest ever deals of its kind.
NTT and NTT DoCoMo executives released details of the plan Tuesday.
The move is intended to enhance the competitiveness of the NTT group as it consolidates its services, said NTT’s CEO Jun Sawada.
“We want to be a game changer,” Sawada said.
He said that between Sept. 30-Nov. 16 the company would buy DoCoMo’s shares at a price of $34.46. DoCoMo’s shares were last trading at $28.39. NTT held about 66 percent of DoCoMo’s shares as of March 31.
The acquisition will be financed by bridge loans, not a share offering, the company said.
The restructuring dovetails with newly installed Prime Minister Yoshihide Suga’s push for lower telecoms rates and more consumer and business-friendly services. It is expected to enable DoCoMo to offer cheaper rates in competition with rivals such as SoftBank and KDDI.
Suga has made expanding digital services a main part of his policy agenda and has called for reforms of the industry’s complex pricing policies and relatively inflexible contract arrangements. Pressures to improve such services have intensified with the push for remote work during the coronavirus pandemic.
NTT’s shares fell 2.7 percent ahead of the announcement, which was made after markets closed. DoCoMo’s shares were suspended from trading. Share prices for other NTT subsidiaries surged ahead of the announcement.
NTT DoCoMo is Japan’s largest mobile carrier, with more than 70 million subscribers. It was founded in 1992. According to its website, it holds a 44.2 percent market share compared with the 32 percent share held by KDDI’s au brand. SoftBank is third ranked, with a nearly 24 percent share.
Although DoCoMo is the market leader, its profits have been eroding, a factor that helped drive the decision to consolidate.
Sawada said there was no direct link between the buyout and cutting mobile subscription prices.
“However, by doing this, DoCoMo will get stronger. That’s why we are doing this. As the result of this, we could build a stable foundation which apparently could give us power to decrease the price,” he said.
The NTT buy out is the biggest ever in Japan and one of the largest worldwide. The biggest so far was the $48 billion acquisition of Dallas, Texas-based energy utility TXU Corp., now known as Energy Future Holdings, by Kohlberg Kravis Roberts, the Texas Pacific Group and Goldman Sachs Capital Partners in 2007.
A trend toward such deals appears to be gathering pace, as Japanese companies sitting on big cash piles adjust their business strategies in a time of growing uncertainty.
NTT traces its roots to 1869, the early days of the telegraph in Japan. Founded in 1952 as the government phone utility, it was privatized in 1987. The company has expanded its network services as its fixed line business has been largely supplanted by mobile phones, at least for individual users.
Japan’s mobile phone rates are on average about half the costs charged in the US and much lower than in Canada and South Korea, according to a study by telecoms services research firm cable.co.uk.
At about $3.90 for 1 gigabyte (1G) of mobile data, however, costs in Japan are far higher than in many European and Asian countries, such as China, where 1G cost 61 cents and India, where the cost was only 9 cents.