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EBRD loans $200m for Egyptian power plant

The EBRD’s funds will be loaned to the West Delta Electricity Production Company, the main contractor for the plant project.

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Egypt hopes to double its current power generation capacity of about 30,000 megawatts by 2020
Egypt hopes to double its current power generation capacity of about 30,000 megawatts by 2020

Egypt and the European Bank for Reconstruction and Development (EBRD) have signed a US$200 million loan to finance a power plant in Damanhur, 160 km (99.4 miles) northwest of Cairo.

The EBRD’s funds will be loaned to the West Delta Electricity Production Company, the main contractor for the plant project.

Egypt is undergoing an energy crisis as rising population, intense heat and fears of terrorist attacks on infrastructure have put capacity 20% behind demand, leading to regular blackouts in parts of the country.

Last month, a senior executive at GE Power told utilities-ME.com that Egypt needed to streamline its financing structure for an effective correction in prevailing power deficits.

“The focus on all new government programs must be well aligned to existing power generation gaps and a proactive remedial approach,” said Azeez Mohammed, President & CEO, Power Services - Middle East, North Africa, Sub-Sahara Africa at GE Power.

“Proper financing structures with a clear emphasis on operational excellence will help to incentivise the power sector.”

The project, which will see the construction of a new 1.8 giga watt combined cycle gas-fired power plant in Damanhur, north-west of Cairo, is also supported by the European Investment Bank, the Arab Fund for Economic & Social Development and the African Development Bank.

Investment in the new plant will increase efficiency and the available generating capacity, tremendously scaling down energy shortages. The plant is also projected to be the most energy and water-efficient plant in the country, reducing the energy generation sector’s carbon footprint by 1.5 million TCO₂ every year.

“The project will support Egypt to catch up with increasing power demands from the industrial, domestic and agriculture sectors. It will also reduce the burden on the main electricity grid,” said Sahar Nasr, Egypt’s minister for international cooperation.

Egypt hopes to double its current power generation capacity of about 30,000 megawatts by 2020 – a target that is seen as key to support ambitious economic growth plans.

Hildegard Gracek, EBRD managing director for the southern and eastern Mediterranean region, pointed out the bank’s interest in financing Egypt’s power generation sector to boost productivity.
“Through this investment we are offering full support to diversify the sources of energy generation, while encouraging energy efficiency and clean energy,” said Gracek.

Overcoming the chronic supply shortages is also essential for sustainable economic growth and improved living conditions for the population, said Gracek.

The country’s power generation sector relies on natural gas for 68.7 per cent of its electricity production, according to the Egyptian state-owned Information and Decision Support Centre (IDSC).

 

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