Call For Tenders: Algeria's Renewable Energy Program Seeks 4,050 MW

In Short

The Situation: With an eye on long-term renewable energy objectives, Algeria's Ministry of Energy is launching an international call for tenders for the development of 4,050 MW.

The Action: The Ministry's Decree establishes two types of Invitations to Tender ("IT"s)—ITs to Investors and ITs by Auction.

Looking Ahead: Power purchase agreements between the producer and the system operator or any other relevant operator will have a maximum duration of 25 years.

The Algerian Program for the Development of New Renewable Energies ("Program") aims to produce 22,000 MW for the needs of the national market over a period extending from 2015 to 2035-2040. More than 4,000 MW are intended to be achieved by 2020. In this context, the Ministry of Energy intends to launch an international call for tenders for the development of 4,050 MW.

"More than 4,000 MW are intended to be achieved by 2020."

The implementation of this solar program has recently been clarified through Executive Decree No. 17-98 of 26 February 2017 ("Decree"), which defines the tendering procedure for the production of renewable or cogenerated energies and their integration in the national system of electricity supply.

The Decree sets out two types of Invitations to Tender ("ITs"):

ITs to Investors, launched by the initiative of the Minister of Energy for previously determined quantities of renewable energies, and applied to larger projects; and ITs by Auction, launched by the initiative of the Commission de Régulation de l'Electricité et du Gaz, the Electricity and Gas Regulatory Commission ("CREG"), for cogeneration offers not exceeding 12 GW or supplying renewable energy corresponding to a minimum power of 10 GW. ITs to Investors cover two components:

The design, supply of equipment, construction, operation of electricity generating facilities from renewable energy sources, and the marketing of electricity produced ("Energy Component"); and The implementation of an investment project in the production of equipment used in the production of electricity from renewable energy sources and/or in the provision of services ("Industrial Component" or "Industrial Project"). The Energy Component will be divided into three batches of 1,350 MW, each to be developed and financed through a SPV held by private investors (49 percent) and state owned companies and/or private Algerian companies (51 percent). Public entities play a central role in the IT to Investors process. In this regard, it...

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