Overview

In response to evolving market conditions in Egypt—particularly following the COVID-19 pandemic, the depreciation of the Egyptian pound against the US dollar, and increasing investor interest—the Egyptian government is considering revising the Feed-in Tariff (FiT) rate for waste-to-energy (WtE) projects. The proposed amendment aims to attract greater investment into the sector.

Such a revision could significantly impact both prospective investors and financial institutions, enhancing the commercial viability and bankability of WtE projects in Egypt.

Detailed Context
As part of its broader environmental strategy and commitment to expanding green energy, the Egyptian Cabinet of Ministers issued Decree No. 41 of 2019, which established the regulatory framework for WtE initiatives.

The Decree sets the following FiT rates:

• EGP 1.40 per kilowatt-hour (kWh) for electricity generated from municipal solid waste and biogas from sanitary landfills
  

• EGP 1.03 per kWh for energy produced from sludge at sewage treatment plants
  
  

Each WtE project is governed by a 25-year Power Purchase Agreement (PPA) between the project developer (the “Owner”) and the respective Governorate where the facility is located. Under this arrangement:

• The Governorate is responsible for supplying the required waste feedstock at no cost to the Owner.
  

• The generated electricity is sold by the Owner to the designated electricity distribution company.
  

• The FiT is paid by the Governorate in Egyptian pounds, using a payment formula attached to the Decree.
  
  

Land required for the project is granted under a usufruct agreement, executed between the Governorate and the Owner, for a term equivalent to the duration of the PPA.

Permissible project capacity ranges from 500 kilowatts to 20 megawatts, ensuring compatibility with the national grid. The Decree also includes a clause stating that the FiT will be re-evaluated once the combined capacity of approved WtE projects reaches 300 megawatts.

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