Egypt’s foreign currency reserves are affecting the company’s renewable energy projects according to a recent Bloomberg interview with Cairo Solar Chairman Hisham Tawfik. Tawfik said that solar-power developers are increasingly concerned about the state of the country’s declining foreign currency reserves.
In the interview Tawfik said that repaying the company’s $51-million loan from the IFC may be difficult, as the payment guarantees from the Egyptian government for electricity produced will be in Egyptian pounds. The government has implemented restrictions which make conversion of pounds more difficult: “How can I be happy if I have a lot of Egyptian pounds in the bank and I can’t change them to dollars,” Tawfik said.
The Egyptian government insists on paying in pounds and financing for energy projects in Egypt which require international purchases becomes more difficult. Combined with problems acquiring international financing, Egypt’s goals for boosting renewable energy’s place in its energy mix have been reduced from 20% to 12%.