Egypt signs conditional contracts with China to build coal-fired power plants

Waad Ahmed , Friday 22 Jan 2016

In this photo provided by the office of the Egyptian Presidency, Egyptian President Abdel-Fattah El-Sisi, right, speaks Chinese President Xi Jinping, during their meeting at the Presidential Palace in Cairo, Egypt, Thursday, Jan. 21, 2016 (Photo: AP)

Egypt signed conditional contracts with Chinese electrical engineering companies to build two coal-fired power plants and develop a transmission grid, electricity ministry spokesman Mohamed El-Yammany told Ahram Online on Friday.

Dongfang Electric Corporation plans to build six units producing 660 megawatts each. The first phase of the power plant will begin with three units at a combined capacity of 1,980 megawatts, for a cost of almost $2 billion.

Shanghai Electric will construct four units at a combined capacity of 2,640 megawatts for a cost of $2.24 billion for the foreign components and LE3.1 billion ($396 million) for the domestic components.

State-Grid Corporation of China signed a $650 million deal to develop the transmission grid to link three under-construction Siemens power plants.

The German industrial company signed an 8 billion euro (approximately $9 billion) deal in June with the Egyptian government to establish three high-efficiency natural gas power plants and wind power installations at a capacity of 16.4 gigawatts.

The Chinese agreements, which are conditioned upon the completion of the technical studies, will be financed by the Export and Import Bank of China (EXIM) and the Industrial and Commercial Bank of China (ICBC), said El-Yammany.

During his two days visit to Egypt, Chinese President Xi Jinping signed a number of cooperation deals aimed to foster over 60 years of ties between the two countries, Egypt's state TV reported.

The deals-- in the transportation, power generation, and civil aviation sectors -- are worth $15 billion, according to Egyptian Minister of International Cooperation Sahar Nasr.

The planned power plants will be built in the Hamrawein area in the Red Sea governorate east of the country, El-Yammany said.

The government signed a memorandum of understanding with the two companies for the projects in March last year during the Sharm El-Sheikh Economic Development Conference.

The use of coal for power generation was approved by Egypt in 2014 due to the shortage of natural gas, despite controversy about its environmental impacts.

Egypt has turned into a net importer of natural gas from a net exporter in the past few years on the back of rising consumption and falling production.

The country has been experiencing an energy crunch since the summer of 2008, taking a further blow following the 2011 uprising.

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