Abu Dhabi firm to build Egypt's first coal power plant

A consortium led by an Abu Dhabi investment firmi has signed a memorandum of understanding to build Egypt’s first coal-fired power plant.

Al Nowais Investments signed the MOU this week with Egypt’s state-owned utility, the Egyptian Electric Holding Company (EEHC). Al Nowais will provide 70 per cent of the capital for the project, the firm’s chairman Hussain Al Nowais said in an interview with the Reuters news service.

The source of the remainder of the funding is still to be determined, although Al Nowais said discussions are underway with investors in Singapore, South Korea, China and Egypt.

Egypt has recently instituted reforms aimed at encouraging foreign investment, with the aim of attracting $14.5bn over the next three years. “Egypt has opened the door for private investment in its power sector and we want to be an early investor,” Al Nowais said.  

The 3960 MW plant is to be built in Ayoun Moussa near the gulf city of Suez and is to include a jetty for imported coal deliveries. A feasibility study is expected to be completed by the end of this year.

Egypt’s residential and industrial sectors experience regular blackouts, especially during the summers when temperatures can climb to 40°C. The nation faces a power shortfall of around 4000-5000 MW, reportedly caused by chronic gas shortages.

Ayoun Moussa already has a 640 MW gas-fired power plant, formerly operated by Siemens and turned over to EEHC in 2001. According to analysts, many of Egypt's gas-run plants are operating at less than full capacity and investors have backed away from further gas-fired power projects.  

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