An agreement was signed on Tuesday between the Egyptian Holding Electricity Company and Emirati Al-Nowais investment company to build Egypt’s latest coal-based power plant in Sinai.
The plant will be located in the Oyoun Moussa area in South Sinai and will produce 1320 megawatts of electricity during its first phase and 3960 megawatts when finished, through utilizing reportedly clean coal that corresponds with global environmental requirements.
The new plant is part of the state’s attempt to meet the growing demand for electricity, as well as to enhance the efficiency of the energy sector, said Minister of Electricity Mohamed Shaker.
According to Reuters, the Abu Dhabi-based Al-Nowais company will provide 70 percent of the capital for the project, while discussions are being held with investors in Singapore, South Korea, China and Egypt to fund the remaining 30 percent of the initiative.
“The Egyptian market is a promising one, and offers many fruitful investment opportunities. I am certain that the economy has started to regain its strength and the trust of investors because it possesses many competitive advantages, such as opportunities for export to Arab, African and European markets due to enormous human resources and its strategic location,” said the head of Al-Nowais company Hussein Jassem al-Nowais, according to privately owned Al-Masry Al-Youm newspaper.
HSBC is the financial advisor for the project and White & Case is the legal advisor, while Italian Technimont is the technical liaison. Consultants have been appointed to assess the environmental impact of the coal, which will be sourced from international markets, such as South Africa and Indonesia, Reuters reported.
Egypt has been working towards finding a new energy mix for industry, particularly cement plants, as well as attempting to solve the country’s energy crisis in a way that ensures future energy security.
There has been a shortfall in production of electricity of about 4000 to 5000 megawatts during the summer months, leading to constant blackouts nationwide.
In April, the Cabinet approved the use of coal for energy generation in Egypt, which was met by an opposition campaign launched by environmental and human rights activists who argued that the long-term negative environmental and health effects of coal outweigh any advantages from the cheap but highly polluting fuel.
The Egyptian Center for Economic and Social Rights (ECESR) accused the cement industry of putting the health of Egyptians at risk while consuming the country’s resources.
The cement industry utilizes 70 percent of the state’s subsidized natural gas and electricity allowance for industry.
A lawsuit was filed with Cairo Administrative Court in May against several state bodies for allowing coal imports. However, the judge presiding over the case stepped down in June following three sessions, citing embarrassment.