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ADB, Egypt Sign 176 Mln € Loan Agreement to Finance Energy Sector
Tunis, 18 October 2005 - The African Development Bank Group on Tuesday in Tunis signed an agreement for a loan of 154.3 million Units of Account* (175.9 million Euro) to finance the El Kureimat Combined Cycle Power Plant Project (Module II) in Egypt.
The agreement was signed by the ADB Vice President in charge of North, East and South Operations, Mr. Theodore Nkodo and the Egyptian Ambassador to Tunisia, Mrs. Shadya Farrag.
Speaking at the ceremony, Mr. Nkodo said the loan "constitutes an important milestone in the Bank's efforts to enhance its responsiveness to the emerging needs of its clients", noting that it "represents the first operation to benefit from the recent changes to the pricing structure of the Bank's loan products for ADB countries".
On her part, Ambassador Farrag commended the Bank for the important role it plays in improving people's lives in Africa. "We are happy that this loan will guarantee electricity supply in the short and long term", she added.
The project involves the construction of a 750-MW combine cycle power plant in the premises of the existing El Kureimat Power Station to increase the generation capacity of the Unified Power System (UPS) to partly meet the electricity demand in the short-to-medium term.
It is expected to improve the provision of energy at minimum cost to the various sectors to promote economic growth and improve the standard of living of the population.
The beneficiaries include all categories of existing and potential customers from all parts of the country. They include households, 98% of which have access to the grid and rely on electricity for their domestic energy requirement. With the electricity requirements of the household sector is increasing faster (10.7% per annum on average) than any other sector, this category of consumers will benefit most from the project. In addition, the agricultural sector will see some gains from the project, since the the sector relies extensively on electricity for water to irrigate farmlands. Finally, the industrial sector, which constitutes one of the key pillars of the economy and a major source of employment will also benefit from the project.
As the Egyptian national grid is interconnected to the Middle East through the Jordanian grid and to the Maghreb through the Libyan grid, consumers in these regions will also benefit from the project.
The Bank Group's operations in Egypt started in 1974. To date, the Group has committed a total of UA 1.41 billion, about 1.7 billion Euros in 48 operations in the country.
Project Information Sheet
" Sources of financing: ADB & UEEPC/EEHC
" Estimated start-up date and duration: June 2005 ; 48 months
" Executing Agency: Upper Egypt Electricity Production Company (UEEPC) /Egyptian Electricity Holding Company (EEHC) Nasr City, Abbassia, Cairo Fax: (202) 2616520, Tel. (202) 2616520
" Procurement of Goods and Services:
The Gas Turbine Generator, the Steam Turbine Generator, the Heat Recovery Steam Generator Switchyard, Environmental Monitoring will be procured through International Competitive Bidding (ICB). Civil Works, which will be financed by UEEPC/EEHC, will be procured using their procurement methods.
1UA = Euro 1.204613 as at 01 /07/05
Felix Njoku Fax: +216 71 10 26 12