Egypt to sign $783 mn loans to improve two power plants

Ahram Online, Sunday 19 Jan 2014

Money will go to power plants in Damietta and south Cairo, to help ease Egypt's electricity woes

Gaber El-Desouky, head of EEHC
Gaber El-Desouky, head of EEHC (Photo: Al-Ahram)

Egypt's electricity holding company (EEHC) intends to sign two soft loans worth $783 million in order to finance two electrical power stations in Cairo and Damietta, state-run new agency MENA reported on Sunday.

According to Gaber El-Desouky, head of EEHC, the loan agreements are part of the country's five-year developing plan for electricity, and will be repaid in a 20-year interval, with a grace period of five years levied by 2 to 4 percent interest.

The first loan, worth $200 million, will be provided by the Islamic Development Bank to finance the partial conversion of West Damietta power plant to a combined cycle system, saving a third of the fuel used in its operation (1.25 million cubic meters).

Desouky told Ahram Online that the loan will allow the 500 megawatt (MW) plant to provide an additional 250 MW, for a total production of 750 MW.

The second agreement comprises $583 million from the International Bank for Reconstruction and Development to finance Cairo's South Helwan power plant, currently under construction, to produce 1950 MW of electricity when it begins operating in 2017.

The five-year-plan aims to reinforce Egypt's electricity grid and lessen the heightened load placed upon it, which has led to frequent power cuts, particularly during summer months due to high temperatures and fuel shortages.

In related developments, EEHC and its subsidiary East Delta Electricity Production Company intend to use the proceeds of a $190 million sovereign loan from the European Bank for Reconstruction and Development to help fund the aforementioned project of West Damietta power plant, in addition to El-Shabab station near the governorate of Ismailia. 

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