The Egyptian Ministry of Electricity signed a financial assistance package with the European Investment Bank (EIB) to improve the electricity sector in Egypt.
The package includes EUR 560m in long-term loans, along with a EUR 20m funding grant from the European Union. The money is to be spent on the construction of the low-energy Giza North power plant, as well as on supporting the existing national electricity distribution network.
“The Giza North power plant establishment costs EUR 8 billion, funded by the EIB, the World Bank, OPEC, and the Egyptian Ministry,” said Hassan Younis, Minister of Electricity and Power, at the signing ceremony, Sunday morning. In an official press release the ministry added that the new plant will save energy.
This is the first project in Egypt where the EIB has led financing under the Neighbourhood Investment Facility. This deal accompanies an earlier agreement signed with the Egyptians in July 2010 for the amount of EUR 460m, a sum also directed at the energy sector. “We welcome the two projects’ contribution to improve energy efficiency and enabling great use of renewable energy in the country,” commented Philippe de la Fontaine, EIB vice president for Mediterranean partner countries, during the signing ceremony. This loan brings EIB's annual lending in Egypt to a record EUR 900m.
The project is intended to support the electricity infrastructure in Egypt after the country had suffered from electricity problems during prime hours throughout the summer. The problem was especially bad during the holy month of Ramadan, when blackouts occurred as a result of overload being put on the national electricity network.