Study on the Financing of Renewable Energy Investment in the Southern and Eastern Mediterranean Region
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Summary Report – October 2010 Summary Report – October 2010 FEMIP Facility for Euro-Mediterranean Investment and Partnership Facility for Euro-Mediterranean Investment and Partnership • Facility for Euro-Mediterranean Investment and Partnership The Mediterranean Solar Plan (MSP) is one of the prior- Press contacts and general information ity projects of the Union for the Mediterranean and aims at coping with the challenges posed by energy demand Anne-Cécile Auguin increases, security of supply and environmental sustain- 3 (+352) 43 79 - 83330 ability in the Euro-Mediterranean region. Its objective is 5 (+352) 43 79 - 61000 to develop an additional renewable energy capacity in U [email protected] the region of 20 GW by 2020 along with the necessary electricity transmission capacity, including international External Offices in Mediterranean FEMIP interconnections. partner countries At the Nice Ministerial Conference on Industry in Novem- Egypt: Jane Macpherson Study on the Financing ber 2008, the Euro-Mediterranean Ministers requested the Head of Office European Investment Bank (EIB) to propose a road map 6, Boulos Hanna Street - Dokki, 12311 Giza for renewable energy in the Mediterranean region under 3 (+20-2) 336 65 83 of Renewable Energy Investment the umbrella of the MSP. U [email protected] This study contributes to this objective. It aims at assessing in the Southern and Eastern the level of maturity of the existing or planned renewa- Morocco: Guido Prudhomme ble energy projects in the different Mediterranean Part- Head of Office ner Countries, the economic impacts of developing these Riad Business Center, Aile sud, Mediterranean Region projects, as well as the main obstacles that may affect their Immeuble S3, 4e étage, implementation. Boulevard Er-Riad - Rabat 3 (+212) 37 56 54 60 The study is financed under the FEMIP Trust Fund, an EIB- U [email protected] managed multi-donor Fund, which supports the develop- ment of the private sector in the Mediterranean region via Tunisia: Robert Feige the financing of studies and technical assistance. Head of Office 70, avenue Mohammed V TN-1002 Tunis Operational contacts 3 (+216) 71 28 02 22 U [email protected] Claudio Cortese Director, Europe’s Neighbour and Partner Countries Department European Investment Bank 3 (+352) 43 79 - 86836 98-100, boulevard Konrad Adenauer in the Southern Region Mediterranean and Eastern Investment of Renewable Energy on the Financing Study U [email protected] L-2950 Luxembourg 3 (+352) 43 79 – 1 Juan Alario 5 (+352) 43 77 04 Head of Division, Energy Efficiency & Renewables www.eib.org/femip – U [email protected] 3 (+352) 43 79 - 82640 U [email protected] Summary Report: Ioannis Kaltsas Head of Institutional and Policy Unit 3 (+352) 43 79 - 86425 U [email protected] © EIB – 10/2010 – QH-30-10-612-EN-C © EIB GraphicTeam Study on the Financing of Renewable Energy Investment in the Southern and Eastern Mediterranean Region Study on the Financing of Renewable Energy Investment in the Southern and Eastern Mediterranean Region European Investment Bank page 1 / 132 Study on the Financing of Renewable Energy Investment in the Southern and Eastern Mediterranean Region Study on the Financing of Renewable Energy Investment in the Southern and Eastern Mediterranean Region European Investment Bank (supervision) - David Gonzalez Garcia, Engineer, Projects Directorate - Sophie Jablonski, Engineer, Projects Directorate - Joyce Liyan, Policy Officer, Europe’s Neighour and Partner Countries’ Department - Manaf Touati, Junior Analyst, Projects Directorate External Consultants - MWH Ahmed Ounalli, Team Leader Salem Mahmoud Elkhodary, Lead Expert Remon Zakaria, Junior Expert - Sebastian Lopez Azumendi, Regulation Specialist The study is financed under the FEMIP Trust Fund. This Fund, which was established in 2004 and has been financed – to date – by 15 EU Member States and the European Commission, is intended to support the development of the private sector via the financing of studies and technical assistance measures and the provision of private equity. page 2 / 132 European Investment Bank Study on the Financing of Renewable Energy Investment in the Southern and Eastern Mediterranean Region Table of Contents EXECUTIVE SUMMARY...............................................................................................13 THE CONTEXT ...........................................................................................................................13 OBJECTIVES AND APPROACH ...............................................................................................13 MAIN RESULTS OF THE STUDY ..............................................................................................13 MAIN CONCLUSIONS AND RECOMMENDATIONS ................................................................17 PART I – REGIONAL OVERVIEW AND ANALYSIS....................................................20 1. INTRODUCTION AND BACKGROUND.................................................................20 1.1. OBJECTIVES ....................................................................................................................20 1.2. APPROACH ......................................................................................................................20 1.3. STRUCTURE OF THE REPORT.......................................................................................21 2. REGIONAL OUTLOOK AND PROJECTS’ ASSESSMENT...................................22 2.1. SUMMARY ........................................................................................................................22 2.2. METHODOLOGY FOR PROJECTS’ ASSESSMENT AND DATA GATHERING ............22 2.3. OUTLOOK OF ENERGY SUPPLY AND SHARE OF RE .................................................23 2.4. OUTLOOK OF ELECTRIC INTERCONNECTIONS..........................................................28 2.5. STAKEHOLDERS DEALING WITH RE ............................................................................30 2.6. OVERVIEW OF THE INSTITUTIONAL AND REGULATORY FRAMEWORKS...............31 2.7. ASSESSMENT OF RE PROJECTS..................................................................................33 3. DESIGN AND SIMULATION OF SCENARIOS ......................................................35 3.1. SUMMARY ........................................................................................................................35 3.2. INTRODUCTION................................................................................................................35 3.3. SCENARIOS......................................................................................................................36 3.4. METHODOLOGY...............................................................................................................36 3.5. RESULTS ..........................................................................................................................38 4. REGIONAL CONSTRAINTS TO DEVELOP IDENTIFIED RE PROJECTS AND MEASURES TO OVERCOME THEM.....................................................................46 4.1. SUMMARY ........................................................................................................................46 4.2. CONSTRAINTS TO THE FULL IMPLEMENTATION OF IDENTIFIED RE PROJECTS........................................................................................................................46 4.3. COUNTRIES’ STRATEGIES.............................................................................................51 4.4. ADDITIONAL MEASURES TO OVERCOME IDENTIFIED CONSTRAINTS....................54 5. CONCLUSIONS......................................................................................................58 PART II – COUNTRY ANALYSIS .................................................................................60 6. ALGERIA ................................................................................................................60 European Investment Bank page 3 / 132 Study on the Financing of Renewable Energy Investment in the Southern and Eastern Mediterranean Region 6.1. OVERALL PRESENTATION OF THE ENERGY SECTOR ..............................................60 6.2. RE PROJECTS’ ASSESSMENT.......................................................................................61 7. EGYPT ....................................................................................................................64 7.1. OVERALL PRESENTATION OF THE ENERGY SECTOR ..............................................64 7.2. RE PROJECTS’ ASSESSMENT.......................................................................................67 8. GAZA/WEST BANK ...............................................................................................72 8.1. OVERALL PRESENTATION OF THE ENERGY SECTOR ..............................................72 8.2. RE PROJECTS’ ASSESSMENT.......................................................................................72 9. ISRAEL ...................................................................................................................76 9.1. OVERALL PRESENTATION OF THE ENERGY SECTOR ..............................................76 9.2. RE PROJECTS’ ASSESSMENT.......................................................................................77 10. JORDAN .................................................................................................................81 10.1. OVERALL PRESENTATION OF THE ENERGY SECTOR ..............................................81