MIDDLE EAST AND NORTH AFRICA (MENA) | ENERGY AND EXTRACTIVES GLOBAL PRACTICE | THE WORLD BANK GROUP Public Disclosure Authorized Public Disclosure Authorized MENA ENERGY SERIES | REPORT NO. 95144-EG Public Disclosure Authorized Local Manufacturing Potential for Solar Technology Components in Egypt Public Disclosure Authorized MIDDLE EAST AND NORTH AFRICA ENERGY AND EXTRACTIVES GLOBAL PRACTICE THE WORLD BANK GROUP Local Manufacturing Potential for Solar Technology Components in Egypt MENA ENERGY SERIES | REPORT NO. 95144-EG MIDDLE EAST AND NORTH AFRICA ENERGY AND EXTRACTIVES GLOBAL PRACTICE THE WORLD BANK GROUP Copyright © 2015 The International Bank for Reconstruction and Development/THE WORLD BANK GROUP 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing July 2015 This is a publication by the Middle East and North Africa Energy and Environment Unit (MENA). 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Araya, ESMAP Designer: Studio Grafik Reproduction: The World Bank Group Contents Acronyms an Abbreviations ............................................................................................................................................ ix Acknowledgments ..........................................................................................................................................................xii Context and Objectives ...................................................................................................................................................1 Chapter 1 | Executive Summary .......................................................................................................................................3 1.1 Rationale ...........................................................................................................................................................3 1.2 Project Pipeline and Demand ............................................................................................................................3 1.3 Industrial and Technical Background .................................................................................................................5 1.4 Existing Industrial Sector ...................................................................................................................................6 1.5 Production Factors ............................................................................................................................................6 1.6 Status of Global Solar Component Value Chain .................................................................................................8 1.7 Solar Industries That Have a Potential to Be Developed in Egypt .....................................................................10 1.8 Market Volume ................................................................................................................................................20 1.9 Aggregated Economic Costs and Benefits Associated with an Enlarged Solar Sector in Egypt ........................22 1.10 Recommendations for the Development of Solar Industries in Egypt ..............................................................25 1.11 Synergistic Actions to Build on Kom Ombo CSP Project .................................................................................28 Part A | Summary Assessment of International Solar Component Manufacturing Value Chains and Outlook for Their Robustness .....................................................................................................31 Chapter 2 | Solar Component Manufacturing Value Chains ............................................................................................32 2.1 Introduction .....................................................................................................................................................32 2.2 Concentrated Solar Power (CSP) Value Chain .................................................................................................34 2.3 Photovoltaic (PV) Value Chain ..........................................................................................................................45 2.4 Current Status of Manufacturing Value Chains .................................................................................................52 Part B | Detailed Assessment of Egypt’s Existing Manufacturing Base and Its Potential to Participate or Dominate the Solar Component Manufacturing Value Chains ..........................................................................55 Chapter 3 | Egypt’s Manufacturing Base and Potential to Participate in Solar Component Manufacturing Value Chains ..........56 3.1 Country Context ..............................................................................................................................................56 3.2 Egyptian Industrial Sector ................................................................................................................................61 3.3 Egypt’s Manufacturing Competitiveness ..........................................................................................................69 Chapter 4 | Potential Value Chains in which Egypt’s Manufacturing Sector Could Participate .........................................79 4.1 Attractiveness of Egypt As a Country ..............................................................................................................79 4.2 Entry Barriers and Key Factors in the Value Chains ..........................................................................................81 4.3 Industries Suggested ......................................................................................................................................93 4.4 Insight of the Suggested Value Chains: CSP Industries....................................................................................93 4.5 Insight Into the Suggested Value Chains: PV Industries ...................................................................................97 Chapter 5 | Demand Forecast ......................................................................................................................................100 5.1 Installed Capacity ..........................................................................................................................................100 5.2 Market Share ................................................................................................................................................101 5.3 Market Volume ..............................................................................................................................................102 Contents | i Part C | Existing and Potential Applications of Solar Technology, Solar Components, and/or Solar Energy in Residential, Commercial, Governmental, and Industrial Sectors .............................................107 Chapter 6 | Existing and Potential Application for CSP Technologies ............................................................................108 6.1 Existing Applications .....................................................................................................................................108 6.2 Potential Applications ....................................................................................................................................108 Chapter 7 | Existing and Potential Application for PV Technologies ..............................................................................120 7.1 Existing Applications .....................................................................................................................................120 7.2 Potential Applications ....................................................................................................................................122 Part D | Potential Economic Costs and Benefits Result from Enlarging Solar Component Manufacturing in Egypt 127 Chapter 8 | Potential Economic Costs and Benefits .....................................................................................................128 8.1 Methodology .................................................................................................................................................128 8.2 Assumptions .................................................................................................................................................130