PROVIDED by the European Investment Bank (EIB) for electricity generation and transmission investment in Egypt, a support package of 560 million euros was signed this week. This came alongside the European Union's 20 million euro grant to the Egyptian Power Transmission Project, also signed this week under the Neighbourhood Investment Facility (NIF).
The projects "aim at increasing electricity generation capacity and ensuring an efficient transmission network," said EIB Vice-President Philippe de Fontaine Vive, who is responsible for Mediterranean partner countries, during the signing ceremony. He added that the bank's financial support to the Egyptian energy sector represents an important milestone in the strong relationship between Egypt and Europe.
The EIB loan for the Egyptian Power Transmission Project is part of a financing package under the NIF, alongside loans from Germany's KfW and Agence Française de Developement, as well as the EU grant funding. This is the first project in Egypt where the EIB has led financing under the NIF. This brings EIB lending in Egypt this year to a record 900 million euros. A $460 million EIB loan was signed in July for the Egyptian Refining Company.
Ambassador Marc Franco, head of the European Union Delegation to Egypt, said: "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 projects will strengthen and expand the Egyptian electricity grid and connect wind farms currently under construction on the Red Sea coast, said Franco. "Increased use of renewable energy is a priority for both the EIB and the Union for the Mediterranean," Franco added.
Another project to be supported by a 300 million euro loan is the 1,500 megawatt Giza North Power Plant. The combined cycle gas fired plant 30 kilometres northwest of Cairo, to be operated by the Cairo Electricity Production Company, is expected to be commissioned in 2014. The project will be financed by the EIB, World Bank and the OPEC Fund for International Development.
© Al Ahram Weekly 2010
