DAMANHOUR COMBINED CYCLE POWER PLANT PROJECT


Overview

  • Reference: P-EG-FAA-020
  • Appraisal Date: 01/09/2015
  • Board Presentation: 26/10/2016
  • Status: LendingLEND
  • Implementing Agency: --
  • Location: Damanhour City

Description

The Damanhour Power Plant Project is part of the 2012 - 2017 generation expansion plan currently under implementation by the Egyptian Electricity Holding Company (EEHC). The project involves the construction of 1500 MW power plant consisting of two highly-efficient combined cycle modules of 750 MW capacity each. The new modules will be installed in a vacant area of the site of the existing Damanhour Power Plant located at the outskirts of Damanhour City in Beheira Governorate, about 160 km north of Cairo. The new plant will fire natural gas. The generated power will be fed into the national grid.

The Damanhour project comprises the following main components and sub-components: A) Civil Works: A.1) Site preparations, civil works, and design, supply and installation of some related equipment; A.2) Yard Tanks; B) Supply and Installation of Equipment: B.1) Combustion Turbine Generators; B.2) Heat Recovery Steam Generators; B.3) Steam Turbine Generators; B.4) Condensers (air cooled); B.5) Switchyard; B.6 & 7) Pumps and Drives (2 packages); B.8) Water and Wastewater Treatment Systems; B.9) Critical Piping and Valves; B.10) Power Transformers; B.11) Instruments & Controls; B.12) Mechanical Equipment & Pipe Installation; B.13) Electrical Equipment & Instrument Installation; B.14) Medium & Low Voltage Switchgear; C) Environmental Monitoring; D) Insurance during project construction; and E) Project management and engineering services. The proposed Bank loan will be used to cover the full cost of component A.1.

The project will be owned and implemented by the West Delta Electricity Production Company (WDEPC), with extensive support from EEHC, especially during the preparation, design and procurement phases. Both institutions are already familiar with Bank rules and procedures through the implementation of previous projects with the Bank. A project implementation team (PIT) will be nominated from the staff of WDEPC to oversee the overall implementation of the Damanhour project at the site. The composition of the team will include the various managerial and technical expertise that will be required for such a project. In addition, an engineering consultant will be recruited to support WDEPC in the project design, implementation and management.


Objectives

The main objective of the Damanhour power plant project is to support socio-economic development in Egypt over the medium-term with expected GDP growth of about 5 - 6%. When operational, the project will increase the power generation capacity in the country by 1500 MW (i.e. by 5% over the 2014 installed capacity). It will contribute to making available 11 ,000 GWh/yr of reliable power supply for all the economic sectors, and therefore helping in meeting part of the demand for electricity of the 35.9 million customers expected at the time of its completion in 2019; including industry, commercial, residential, agriculture and public sectors and social services throughout the country.


Rationale

The systematic expansion of the power sector is key for Egypt to be able to achieve its ambitious socio-economic development goals. Accordingly, EEHC is currently finalising the implementation of the 2007 - 2012 power generation expansion plan with the last project successfully coming online, thus concluding the addition of a total capacity of 7,000 MW. An additional 2,600 MW were brought online in 2012 through a fast-track expansion plan. The 2012 - 2017 generation expansion plan aims at adding a total of 13,200 MW of new thermal capacity (steam and combined cycles units). The plan is currently under various implementation phases, with 2,050 MW already under operation, 4,150 MW under construction, whereas the remaining projects of the targeted capacity (including Damanhour) are still in different preparation phases. The total plan is expected to be completed in 2019. Finally, EEHC is almost finalising the new power generation plan for 2017 - 2022, which is expected to target the addition of about 19,650 MW.


Benefits

The existing Damanhour Power Plant currently employs a total of about 1 ,250 staff - with approximately 20% women. Given that some units in the existing plant are very old and are therefore expected to be retired after the construction of the new combined-cycle modules, current staff of the old units are likely to be transferred to the new plant as works progress. As such, there might be very limited scope for new permanent job opportunities for the operation of the new plant. On the other hand, the project has the potential for creating about 2000 job opportunities during its construction phase comprising professional, semi-professional and casual labour. Construction work would also benefit the surrounding communities through informal sector activities including transport, kiosks, and food vendors. The project will also have indirect benefits through the business opportunities that will be created for many of the supporting industries and services in the country. It is estimated that about 40% of the total project cost would be expended in the local economy; thus directly contributing to a very important dimension of socio-economic development in Egypt.


Key contacts

EL-ASKARI Khaled Mohamed Samir - RDGN1


Estimated Cost

Amount
 1,208,000,000