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Lebanon signs 11 solar PPAs, but financial closure remains challenging

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The federal government of Lebanon has signed energy buy agreements (PPAs) for 11 initiatives with 165 MW of PV capability. Traders have one yr to attain monetary closure.

Lebanon’s Ministry of Power and Water has signed PPAs for the 165 MW of photo voltaic it chosen in a PV tender launched just a few years in the past. The method of awarding 180 MW of PV capability unfold over 12 initiatives started a number of years in the past, and initially attracted 42 purposes.

In 2019, the ministry printed a brief record of 28 candidates. Final yr, the federal government issued licenses to 11 profitable initiatives, unfold over 4 important areas: Bekaa (together with the provinces of Bekaa and Baalbek-Hermel), Mount Lebanon, South ( the provinces of South Lebanon and Nabatiyeh), and North (together with North Lebanon and Akkar).

The delicate design permits the federal government to barter completely different tariffs for every of the 4 delicate areas. For the Bekaa, which is the sunniest of the 4 areas, one investor bid $0.057/kWh, so all three 15 MW farms should settle for the tariff. Tasks within the different three areas will obtain a tariff of $0.0627/kWh, legitimate for 25 years from their industrial operation dates.

These costs are recognized since 2021, “however might change alongside the best way,” Gabriel De Lastours, the regional head of the European Financial institution for Reconstruction and Improvement (EBRD), advised pv journal.

The prolonged tender course of was primarily as a result of Lebanon’s extreme and ongoing monetary and political disaster, which raised doubts in regards to the bankability of the 11 lately signed energy buy agreements (PPA) and the traders’ potential to attain monetary shut.

“The supply of worldwide debt financing will rely upon the implementation of structural reforms,” ​​commented De Lastours, including that “we [the EBRD] believes that sovereign threat will stay a problem. “

De Lastours talked about that the financial institution is working with the federal government and stakeholders from all sectors to create an revolutionary framework that addresses the rising sovereign threat related to energy buy agreements (PPAs). Regardless of this, he emphasised that the latest signing of 11 PPAs is a vital achievement, because it builds on profitable examples within the area and the intensive efforts of the Ministry of Power, supported by worldwide specialists and monetary establishments such because the EBRD, in the course of the 2017- 2020 interval for wind initiatives.

Constructing on the 20-year PPAs signed in 2018 for 3 wind farms in Akkar with a mixed capability of 226 MW, De Lastours expressed the EBRD’s dedication to work with the Lebanese authorities to enhance the bankability of the PPAs .

Lebanon goals to get 30% of its electrical energy and warmth from renewable sources by 2030, and the latest signing of 11 photo voltaic PPAs marks the nation’s first foray into utility-scale photo voltaic growth.

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