AfDB Approves US$ 450 million Loan to Finance Thermal Power Project in Egypt
Tunis, December 22, 2008 - The Board of Directors of the African Development Bank (AfDB) Group on Monday, December 22, in Tunis, approved an ADB loan of US$ 450 million, to finance a thermal power project in Egypt.
The project involves the construction of a 1300 MW (2x650 MW) supercritical steam turbine power plant located adjacent to the sea port of Ain Sokhna on the Gulf of Suez, 112 km east of Cairo. The Project objective is to enhance Egypt’s socio-economic development by providing infrastructure to increase generation capacity in the country in order to partially meet the electricity demand on the Unified Power System (UPS). This is in line with government’s 6th National Development Plan (2007-2012) in which the expansion of electricity infrastructure is among top priorities. The power demand in Egypt is growing at a very fast rate (6.38% per year) and in order to meet this demand, EEHC (Egyptian Electricity Holding Company) has to implement generation projects to match the demand. This project is the least expensive in terms of meeting part of the demand for the 2013-2014 period.
The direct beneficiaries of the project will be the country’s population (with an electricity coverage rate of 99.3%) given that the power generated from the plant will feed into the national grid through the UPS. This will therefore mean that both urban and rural populations will benefit from the incremental power resulting from the project. Some people around the project site will get employed during the project’s implementation and operation. The contractors will benefit from services delivered. The power generated will be used for industrial and commercial activities country-wide thus contributing to job creation, increase in productivity, electricity connection rates and improvement in quality of life.
The Bank has been involved in Egypt’s power sector since 1974 and has, over the years, acquired wide experience in handling power sector needs in the country. The Bank has supported the expansion of Egypt’s power sector through the financing of the development of seven power stations, one transmission project and two rural electrification projects. The Bank also provided grant funds for the studies of solar heat and conservation and the Egypt-DRC power interconnection with the Grand Inga Hydropower site.
The project is expected to last 68 months. It is estimated at US$ 1.850 billion with the AfDB loan financing 22.42% of the project. The rest of the financing is provided by the World Bank (29.90%), EEHC (27.22%), Fades Arab Fund (10.23%), KFAED Kuwait Fund (10.23%).
Since starting operations in Egypt, the AfDB has financed 67 programmes worth US$3.328 billion.