Photo: ENEL

SolarPower Europe discussed upcoming 4 GW tender for solar with Algerian delegation

By Alexandre Roesch, Policy Director of SolarPower Europe

As a follow-up to our trade mission in Algiers in 2016, SolarPower Europe participated on 15 March in a meeting with the European Commission and a high-level Algerian delegation to discuss the upcoming Algerian 4 GW solar tender.

This tender, for a total capacity of 4050 MW, will be based on two components: an energy component which foresees three batches of 1350 MW each and an industrial component aimed at building manufacturing capacities (cells and modules) in Algeria.

The decree providing the legal basis for the tender is now finalised and the call for tenders will be published very soon. After that, the Algerian authorities foresee a period of 4 months for clarifying and, where appropriate, adjusting the specifications of the tender with all applicants. They aim for a financial closing by end 2018 and foresee the building of the capacity between 2019 and 2025, a time horizon by which the necessary grid reinforcements will be completed to increase the hosting capacity of the transmission network.

In terms of remuneration, the 20 years PPA will be indexed and based on a sliding premium mechanism for the entirety of the electricity produced. Although the breakdown of share capital within the Special Purpose Vehicle will foresee that private investors will only be able to retain 49% of the shares, the operational management will be transferred to the foreign investor.

During the discussion with the Algerian delegation, several questions were raised about the industrial component. Indeed, while the energy component of the tenders could lead to 3 different winners, the industrial component will lead to only one industrial project being selected. This is to ensure that the manufacturing plant will be large enough to compete with international standards. This raises the question of what will happen for those bidders which won on the energy component but not on the industrial component.

SolarPower Europe will continue to support the dialogue with the Algerian government in close cooperation with the European Commission.