23 MW Sovereign Backed Development Ma’an, Jordan
Constrained by high fuel prices and a dearth of local resources, leading to 20% of the national GDP being spent on energy and fuel, Jordan was the first country in the Middle East to launch a sovereign backed utility scale renewable energy procurement program.
The generous tariff of 0.17 USD/kwh for twenty years presented an outstanding returns opportunity, which DT’s team immediately recognized. DT and Enerray Spa stepped in as developers of the Falcon Ma’an 23.1 MW project located within the Ma’an Solar Park. The project had been in development for 5 years, and DT brought it to successful financial close within a year of becoming a shareholder. The project is backed by a 20 year power purchase agreement (PPA) with the National Electric Power Company.
The project will enter commercial operation in October 2015, achieving an IRR in excess of 40% on a project cost 50 million USD, including a 40 million USD IFC syndicated loan. DT is currently undertaking the turn-key EPC contract on the project, and will be operation & maintenance provider.
- 23.1 MW Project located in Ma’an, Southern Jordan
- Sovereign guaranteed power purchase agreement
- Commercial operation expected in October 2015
- DT is acting as both Developer and EPC
- IFC led financing for over 40 million USD
10 MW DBOM Project Aqaba, Jordan
Alongside joint venture partners Enerray SpA, Desert Technologies has been awarded the turn-key DBOM (Design, Build, Operate, Maintain) contract for the 10.08 MW Shamsuna Project located in the Aqaba Special Economic Zone.
Like DT’s Falcon Ma’an solar plant, the project is part of Jordan’s first round of photovoltaic energy procurement, and will be supplying energy to Jordan’s National Electric Power Company. The award to DT demonstrates the competitiveness of the EPC joint venture, and confirms the company as a leading renewable energy contractor in the Middle East.
- 10.08 MW Project located in Aqaba, Southern Jordan
- DT acting as EPC contractor and O&M provider
- Landmark project in Round 1 of Jordan’s renewable energy procurement process, the first major solar government tenders in the MENA region
- Commercial operation expected in September 2015
150 MW Wind and Solar Portfolio, Benben and Gulf of Suez, Egypt
Given a national shortage of at least 5 GW in electricity supply alongside fast growing demand, causing blackouts throughout the country, the new Egyptian government is moving quickly to secure additional supply. It is expected that Egypt will be adding over 1 GW in Solar Photovoltaic projects to the grid per year until 2020.
DT, alongside its Italian Partners, has been awarded two 50MW sovereign backed photovoltaic projects with a tariff of 0.143 USD/kwh for 25 years, and one 50MW wind project with a variable 20 year tariff depending on number of full operating hours per year. With this exceptional award, DT has further established itself as one of the leading developers in the region after its pioneering projects in Jordan.
The projects are 50% owned by DT and are our on track to achieve an annual IRR in excess of 30%. DT will also be acting as EPC contractor and O&M provider for the projects.
- 2 x 50MW PV Projects located in Benben and 1 x 50MW Wind located at Ras Gharib, Gulf of Suez
- 50% owned by DT
- Backed by sovereign guaranteed power purchase agreements
- Commercial Operation expected in September 2016
- Project Value in excess of 350 million USD
95MW Manufacturing Project Jeddah, Kingdom of Saudi Arabia
Saudi Arabia is poised to become the largest renewable energy market in the Middle East, given the enormous opportunity cost of the Kingdom’s massive subsidized domestic oil consumption. As much as 35% of the oil extracted by Saudi Arabia each year is sold for less than 4 US dollars a barrel to the Saudi Electrical Company and other utilities to produce energy. The government is still finalizing the structure of Saudi’s massive renewables program, expected to be over 1 GW a year. It is already clear that given the Kingdom’s focus on stimulating domestic industry and diversifying the economy, mean local content incentives will be the key driver of market share, as they were in the solar market in South Africa.
With the aim of securing a major competitive advantage through the local content incentives, DT has acquired a state-of-the-art 75 MW Reis Robotics crystalline silicon assembly line and a 20MW EPV Solar amorphous silicon manufacturing line, and have started installation in a factory building in South Jeddah.
The factory building is currently finishing electromechanical upgrades, and the equipment should be ready to begin commercial production in October 2015. These locally produced modules will enable DT to be more competitive and secure a large market share within Saudi Arabia.
Furthermore, this investment in manufacturing is a pilot project to evaluate entering the international module production market. Depending on the market’s appetite, DT will consider expanding upstream in the crystalline silicon value chain to become a vertically integrated solar company. The manufacturing division would aim to achieve a capacity of 500 MW within 3 years, based on a 600 million USD capital investment. At this capacity, DT would achieve economies of scale to become internationally price competitive.
Beyond DT’s regional markets in MENA, the manufactured modules would target the US and European markets, where prices are artificially higher due to anti-dumping tariffs targeting Chinese and Taiwanese manufacturers.