Orascom in talks to finance $5bn plant in Egypt
Contractor negotiating with banks in the region to fund Red Sea mega plant.
Orascom Construction is in talks with banks to finance the first phase of a $5bn coal-fired power plant in Egypt, according to Reuters.
Last November, the company announced a joint venture with Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC) to build the power plant with a total capacity of 3,000-4,000 MW on Egypt’s Red Sea coast.
The project is split into two phases. The first phase will provide 1,800-2,000 MW and will cost about $3bn, while the total budget is $5bn, Orascom Construction chief executive Osama Bishai told reporters in Dubai.
The firm is negotiating with leading banks in the region to arrange the debt part of the first phase.
“We are targeting to achieve financial close if not the end of this
year, the first quarter of next year,” Bishai said.
“These transactions take at least 12-15 months. With this type of transaction, you’re looking at somewhere like 80 (per cent) debt and 20 (per cent) equity.
“We’re talking to other strategic and technical investors that may come or may not,” Bishai added. “Once we conclude that, the final structure will be announced.”
The first phase would likely take 30-38 months to build, although construction could start prior to financing being finalised, while the second phase could start before the first was completed if the government approved it.