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Large Land Areas Allotted for Renew

Large Land Areas Allotted for Renewable Energy
A recent Presidential Decree has assigned vast stretches of land (approximately 4.5 million feddans, which is equivalent to about 18900 square kilometers, which represents about 1.9% of the total area of Egypt) to the New and Renewable Energy Authority (“NREA”) which operates under the supervision of the Ministry of Electricity and Renewable Energy (the "Decree").[1] The newly assigned area will be used for the establishment of power stations which will generate electricity through the use of wind and solar energy or from photovoltaic cells. The Presidential Decree allows the NREA to establish these projects on its own or through contracting with private investors, with the requirement that investors are only given usufruct rights over the allotted areas. Detailed regulations considering the establishment and the contracts between public and private parties will be determined by the Cabinet of Ministers.
Background
Interest in the renewables sector has considerably intensified over the past few years. This is in part a reaction to the unprecedented energy crisis the country is facing, which has pressured the government to seek new investments in the energy sector and to look for alternatives for existing energy sources, either through creating new projects or through direct import of other energy sources, such as coal. Such increased interest was paralleled by some major legislative changes concerning renewable energy, such as the December 2014 Law for the Stimulation of New and Renewable Energy, which provided several scenarios for partnership between the public and private sector on renewable energy projects (See the January 2015 Issue of the Egypt Legal Update).[2] Prior to that, a highly significant decree by the Prime Minister set the values of new feed-in tariffs for solar and wind energy, which set the prices at which the Egyptian government is willing to purchase electricity generated by renewable technologies (See the November 2014 Issue of the Egypt Legal Update).[3] Between both decrees, a Presidential Decree amending the NREA Law was enacted, expanding its mandate significantly and giving it primary responsibility over the execution and maintenance of renewable energy projects, either by itself or through other public or private actors (See the December 2014 Issue of the Egypt Legal Update).[4] The March 2015 amendments to the Investment Law had also provided for some concessions/privileges to investors in the electricity sector, including renewable energy. Article (20) stipulates that "Concessions and additional non-tax incentives can be granted [to] those investing in the generation of electricity from conventional or new and renewable energy sources”. Such privileges include allowing the establishment of private customs outlets, repayment of the value of delivering the utilities to the land allocated to the investment project and payment of the employee’s and the employer’s share in the social insurance.[5]
Recent Allotment of Land
The recent Decree allotting vast areas of land for the establishment of renewable energy power plants is mainly important because of the sheer size of these areas. The area, which totals nearly 4.5 million feddans, is divided across 17 different plots of land, starting with smaller areas not exceeding 10 feddans, and reaching huge areas reaching over 2.5 million feddans in Hurghada and over 1 million feddans in the “East and West Nile” area. While the recent Decree mandated the Cabinet of Ministers to issue detailed standards to regulate the establishment of the prospect projects by the NREA or by the private sector, this will have to be done in compliance with the December 2014 Law for the Stimulation of New and Renewable Energy, which listed four possible scenarios for cooperation between private investors and the NREA in the building, maintenance and operation of renewable energy power stations (See the January 2015 Issue of the Egypt Legal Update).
Conclusion
The recent legislative and executive developments and increased attention to the renewable energy sector are in line with the constitutional obligations under Article 32 of the 2014 Constitution, which obliges the state to “make the best use of renewable energy sources, motivate investment therein, and encourage relevant scientific research”. The recent Presidential Decree is an additional evidence of the increased importance this sector is starting to play in Egypt. The Government has signed a number of memoranda of understanding with renewable energy companies (at least 42 in relation to solar energy and 10 in relation to wind energy in 2015 alone). However, it is unclear how many of those have already been translated into contracts. While there have been significant legislative developments in recent years, the recent Decree failed to mention any of the recent laws and regulations that were enacted to organize this sector, including the December 2014 Law for the Stimulation of New and Renewable Energy and the 2014 amendment to the NREA Law.   [1] Presidential Decree No 116/2016, Official Gazette, Issue No. 11 (bis) (e), 23 March 2016. [2] Presidential Decree-Law No 203/2014, Official Gazette, Issue No. 51 (bis) (a), 21 December 2014 [3] Prime Minister Decision 1947/2014, Official Gazette, Issue No. 43 (bis) (c), 27 October 2014,. [4] Presidential Decree No 135/2014, Official Gazette, Issue No. 42 (bis) (a), 22nd of October 2014 [5] Presidential Decree-Law No. 17/2015, Official Gazette, Issue No. 11 (bis), 12 March 2015.
A recent Presidential Decree has assigned vast stretches of land (approximately 4.5 million feddans, which is equivalent to about 18900 square kilometers, which represents about 1.9% of the total area of Egypt) to the New and Renewable Energy Authority (“NREA”) which operates under the supervision of the Ministry of Electricity and Renewable Energy (the "Decree").[1] The newly assigned area will be used for the establishment of power stations which will generate electricity through the use of wind and solar energy or from photovoltaic cells. The Presidential Decree allows the NREA to establish these projects on its own or through contracting with private investors, with the requirement that investors are only given usufruct rights over the allotted areas. Detailed regulations considering the establishment and the contracts between public and private parties will be determined by the Cabinet of Ministers.
Background
Interest in the renewables sector has considerably intensified over the past few years. This is in part a reaction to the unprecedented energy crisis the country is facing, which has pressured the government to seek new investments in the energy sector and to look for alternatives for existing energy sources, either through creating new projects or through direct import of other energy sources, such as coal. Such increased interest was paralleled by some major legislative changes concerning renewable energy, such as the December 2014 Law for the Stimulation of New and Renewable Energy, which provided several scenarios for partnership between the public and private sector on renewable energy projects (See the January 2015 Issue of the Egypt Legal Update).[2] Prior to that, a highly significant decree by the Prime Minister set the values of new feed-in tariffs for solar and wind energy, which set the prices at which the Egyptian government is willing to purchase electricity generated by renewable technologies (See the November 2014 Issue of the Egypt Legal Update).[3] Between both decrees, a Presidential Decree amending the NREA Law was enacted, expanding its mandate significantly and giving it primary responsibility over the execution and maintenance of renewable energy projects, either by itself or through other public or private actors (See the December 2014 Issue of the Egypt Legal Update).[4] The March 2015 amendments to the Investment Law had also provided for some concessions/privileges to investors in the electricity sector, including renewable energy. Article (20) stipulates that "Concessions and additional non-tax incentives can be granted [to] those investing in the generation of electricity from conventional or new and renewable energy sources”. Such privileges include allowing the establishment of private customs outlets, repayment of the value of delivering the utilities to the land allocated to the investment project and payment of the employee’s and the employer’s share in the social insurance.[5]
Recent Allotment of Land
The recent Decree allotting vast areas of land for the establishment of renewable energy power plants is mainly important because of the sheer size of these areas. The area, which totals nearly 4.5 million feddans, is divided across 17 different plots of land, starting with smaller areas not exceeding 10 feddans, and reaching huge areas reaching over 2.5 million feddans in Hurghada and over 1 million feddans in the “East and West Nile” area. While the recent Decree mandated the Cabinet of Ministers to issue detailed standards to regulate the establishment of the prospect projects by the NREA or by the private sector, this will have to be done in compliance with the December 2014 Law for the Stimulation of New and Renewable Energy, which listed four possible scenarios for cooperation between private investors and the NREA in the building, maintenance and operation of renewable energy power stations (See the January 2015 Issue of the Egypt Legal Update).
Conclusion
The recent legislative and executive developments and increased attention to the renewable energy sector are in line with the constitutional obligations under Article 32 of the 2014 Constitution, which obliges the state to “make the best use of renewable energy sources, motivate investment therein, and encourage relevant scientific research”. The recent Presidential Decree is an additional evidence of the increased importance this sector is starting to play in Egypt. The Government has signed a number of memoranda of understanding with renewable energy companies (at least 42 in relation to solar energy and 10 in relation to wind energy in 2015 alone). However, it is unclear how many of those have already been translated into contracts. While there have been significant legislative developments in recent years, the recent Decree failed to mention any of the recent laws and regulations that were enacted to organize this sector, including the December 2014 Law for the Stimulation of New and Renewable Energy and the 2014 amendment to the NREA Law.   [1] Presidential Decree No 116/2016, Official Gazette, Issue No. 11 (bis) (e), 23 March 2016. [2] Presidential Decree-Law No 203/2014, Official Gazette, Issue No. 51 (bis) (a), 21 December 2014 [3] Prime Minister Decision 1947/2014, Official Gazette, Issue No. 43 (bis) (c), 27 October 2014,. [4] Presidential Decree No 135/2014, Official Gazette, Issue No. 42 (bis) (a), 22nd of October 2014 [5] Presidential Decree-Law No. 17/2015, Official Gazette, Issue No. 11 (bis), 12 March 2015.