Egypt accelerates $3bn coal power plant
Orascom and IPIC to forge ahead with 3,000MW project on Red Sea coast.
Orascom Construction and Abu Dhabi-based International Petroleum Investment Company (IPIC) look set to fast track plans for a $3bn coal-fired power plant in Egypt.
The joint venture has signed a follow up agreement to a Memorandum of Understanding (MoU) with the Egyptian government in November 2014 which granted it an 18-month exclusivity period over a project site in the vicinity of El Hamrawein Port on the Red Sea coast, a statement said.
Under the new development agreement, the consortium now has been guaranteed site access to carry out necessary development studies while land allocation formalities are being finalised.
Furthermore, the consortium is committed to carrying out port development work relating to the import and handling of coal shipments, and the government has pledged full support in assisting the consortium in satisfying the necessary regulatory requirements.
The agreement also covers various operational aspects such as the Power Purchase Agreement (PPA) and connection to the national grid.
His Highness Sheikh Mansour bin Zayed Al Nahyan, Chairman of IPIC, Deputy Prime Minister of the UAE and UAE Minister of Presidential Affairs, said: “This landmark project is one of many examples of future development initiatives between the UAE and Egypt.
“Under the direction of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, we look forward to pursuing future investment and development opportunities that will address areas of growth in Egypt’s economy.”
His Excellency Khadem Al Qubaisi, Managing Director of IPIC, said: “Today’s announcement only relates to the first of two phases of this project with the Egyptian government.
“IPIC is focused on investments that are expected to make a significant impact on the growth of the Egyptian economy across its areas of expertise.
“We are very pleased with the progress made so far, and believe that this project provides a solid foundation for potential future investments and collaboration with Orascom Construction.”
Funding will be made up of a mixture of debt and sponsor equity. The debt is planned to be sourced from a variety of liquidity pools including Egyptian, GCC, & international financial institutions as well as export credit agencies.
The OC-IPIC consortium has received letters of interest from banks to underwrite the debt portion for up to $1.95bn.
National Bank of Abu Dhabi will be acting as the project’s co-financial advisor and will be supporting the project as part of the Banking Consortium.
The Initial Mandated Lead Arrangers, Underwriters and Book Runners will include Arab African International Bank, Arab Bank, Banque Misr, Commercial International Bank, National Bank of Abu Dhabi, National Bank of Egypt and QNB Alahli.