Egypt’s Ministry of Electricity announced the signing of financing deals for two major electricity projects on Monday.
A consortium of banks agreed to loan 2 billion euros to finance a power plant to be built by German firm Siemens and Egypt’s El Sewedy Electric, Reuters news agency reported.
In a separate deal, the Kuwait Fund for Arab Economic Development agreed to loan US$100 million to help link Egypt’s electricity grid to Saudi Arabia’s.
The 2 billion euro loan to Siemens and El Sewedy group will go towards the construction of a 4,800 megawatt natural-gas burning, combined cycle power plant in Beni Suef.
The plant is the first phase in an 8-billion-euro plan that calls for Siemens and its local partners Elsewedy and Orascom to build three gas-fired plants, with a total capacity of 14.4 gigawatts, as well as 12 wind farms with a combined capacity of 2 gigawatts. Plans, which were announced in June call for the first 4.4 gigawatts to come online by summer 2017, with the rest within 38 months of financing agreements being reached.
The contract is the largest in Siemen’s history, and the company claims it will increase Egypt’s power generation by 50 percent.
Meanwhile, Egypt and the Kuwait Fund signed a 30 million Kuwaiti dinar (roughly US$100 million) loan that will help finance a long-discussed plan to join the national energy grids of Egypt and Kuwait. The $1.6 billion project aims to allow the two countries to share roughly 3,000 megawatts of electricity, taking advantage of the fact that Saudi Arabia’s electricity demand peaks in the afternoon, while Egypt’s peaks after sunset. It is part of a larger plan to interconnect energy grids throughout the Arab world, the Electricity Minister said.
Faced in recent years with crippling summertime power cuts, Egypt’s government is seeking to increase and upgrade the country’s electricity-generating facilities.