EU, European Investment Bank provide over 580MM for power developments in Egypt

Source: European Investment Bank (EIB)

The European Investment Bank will provide a EUR 560 million (US $810 million) support package for priority electricity generation and transmission investment in Egypt, alongside EUR 20 million (US $27.9 million) European Union grant funding under the Neighborhood Investment Facility. This brings European Investment Bank lending in Egypt this year to a record EUR 900 million (US $1.26 billion). The projects signed today follow a US $460 million (US $643 million) EIB loan signed in July for the Egyptian Refining Company.

H.E. Hassan Younis, Minister of Electricity and Energy and Marc Franco, European Union Ambassador to Egypt witnessed the signing ceremony for the EIB loans and signed a Financing Agreement for the European Union's EUR 20 million (US $27.9 million) grant contribution for the Egyptian Power Transmission Project.

Philippe de Fontaine Vive, European Investment Bank Vice President responsible for Mediterranean partner countries said: “Increased electricity generation capacity and contribution to an efficient transmission network resulting from the projects signed today will contribute to economic prosperity of Egyptians across the country. We welcome the two projects' contribution to improved energy efficiency and enabling greater use of renewable energy in the country. Record European Investment Bank financial support both to Egypt and the Egyptian energy sector represent important milestones in the strong relationship between Egypt and Europe.”

Ambassador Marc Franco, Head of the European Union Delegation to Egypt, said: “Realization of the Egyptian Power Transmission Project demonstrates the success of the EU's Neighbourhood Investment Facility. The NIF shows how design of financing packages offered by European Development Finance Institutions can be tailored to address Egypt's specific infrastructure financing needs, in particular the energy sector.”

The EUR 260 million (US $363 million) EIB loan for the Egyptian Power Transmission Project forms part of a financing package under the Neighbourhood Investment Facility, alongside loans from Germany's KfW and Agence Francaise de Developpement, as well EU grant funding. This is the first project in Egypt where the EIB has led financing under the Neighbourhood Investment Facility.

It will strengthen and expand the Egyptian electricity grid and connect wind farms currently being constructed on the Red Sea coast. Increased use of renewable energy is a priority of both the European Investment Bank and the Union for the Mediterranean.

Construction of the 1500MW Giza North Power Plant will be supported by a EUR 300 million (US $419 million) EIB loan. The combined cycle gas fired plant 30km northwest of Cairo, to be operated by the Cairo Electricity Production Company, is expected to be commissioned in 2014. It is expected that the plant construction will benefit from technical assistance to promote more energy-efficient combined-cycle technology. The project will be financed by the European Investment Bank, World Bank and OPEC Fund for International Development.

The finance agreements for the Giza North Power Plant and Egyptian Power Transmission Project were signed in Cairo earlier today by Philippe de Fontaine Vive, European Investment Bank Vice President responsible for Mediterranean partner countries, Dr. Mohammed Mohammed Awad, Chairman Egyptian Electricity Holding Company, Fathallah Lofty Shalaby, Chairman and Managing Director of the Egyptian Electricity Transmission Company, and Ahmed Mustafa Iman, Chairman and Managing Director of the Cairo Electricity Production Company.

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