Europe is backing Egypt’s power sector with a €560-million support package for priority electricity generation and transmission investment from the European Investment Bank (EIB). This latest deal brings the Bank’s lending in Egypt to a record €900 million, following a $460-million loan signed in July for the Egyptian Refining Company. In addition, the EU will give a grant worth €20-million under the Neighborhood Investment Facility (NIF).
The loan will be broken down into two projects with €260 million going for the Egyptian Power Transmission Project that will strengthen and expand the Egyptian electricity grid and connect wind farms currently being constructed on the Red Sea coast. This is the first project in Egypt where the EIB has led financing under the NIF with additional funding coming from Germany’s KfW, Agence Francaise de Development, and the EU grant.
Egypt had previously announced that it hoped to attain $110 billion in investments in its energy sector by 2027. In July, Japan approved a $432-million soft loan to Egypt for a 220-MW wind farm project in Gabal El Zeit, located on the western coast of the Gulf of Suez. Another benchmark for this project includes a $150-million Clean Technology Fund (CTF) investment, which is the first project that the CTF has supported in the MENA region.
The second project will be the construction of the 1,500 MW Giza North Power Plant that will be supported by a €300-million EIB loan. The combined cycle gas fired plant 30 km northwest of Cairo, to be operated by the Cairo Electricity Production Company, is expected to be commissioned in 2014.
Philippe de Fontaine Vive, EIB Vice President responsible for Mediterranean partner countries said: “We welcome the two projects’ contribution to improved energy efficiency and enabling greater use of renewable energy in the country. Record EIB financial support both to Egypt and the Egyptian energy sector represent important milestones in the strong relationship between Egypt and Europe.”
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