Egypt considering selling power plants to private investors: Minister

Reuters , Tuesday 28 May 2019

Mohammed Shaker
Minister of Electricity Mohammed Shaker (Photo: Al-Ahram)

Egypt is considering selling three recently built power plants to private investors, but talks are still at an early stage, Electricity Minister Mohamed Shaker said on Tuesday.

The plants, billed at the time as the world’s biggest, were built by Siemens AG in a 6 billion euro ($6.7 billion) deal signed in 2015. Egyptian President Abdel Fattah al-Sisi inaugurated them in July.

“The negotiations are still in the early stages,” Shaker told Reuters by telephone. He declined to disclose further details.

Bloomberg reported on Monday that Blackstone Group and Edra Power Holdings of Malaysia had both expressed interest in taking over the plants and selling the electricity generated back to the Egyptian government, a step that would reduce public debt.

A person with knowledge of the power plants’ financing said a similar plan was broached last year to sell the plants either to investors or through an initial public offering, but nothing came of it.

“So I don’t know whether this one will progress. The only thing I know is that it would be complicated given the debt package in place,” the person told Reuters.

To finance the construction, Egypt brought in Deutsche Bank , HSBC Holdings and KfW IPEX-Bank to structure and arrange the international portion and used local banks to finance the Egyptian pound portion.

It also brought in export credit agencies (ECA) to secure the facilities, Siemens said at the time.

Egypt awarded a $352 million contract in September to Siemens and Siemens Technologie to manage the plants.

The three plants alleviated an acute power shortage marked by rolling power outages and cuts to industrial output in the years following Egypt’s 2011 uprising.

Egypt sold 4.5 percent of the shares of state-controlled tobacco monopoly Eastern Company in March in the first of a series of partial privatisations planned over the next few years.

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