The monetary support is intended to strengthen and expand the Egyptian electricity grid and connect wind farms currently being constructed on the Red Sea coast. Increased use of renewable energy is a priority of both the European Investment Bank and the Union for the Mediterranean.
The move brings the European Investment Bank’s lending in Egypt this year to a record €900 million.
H.E. Hassan Younis, Egypt’s Minister of Electricity and Energy and Marc Franco, European Union Ambassador to Egypt, participated in the signing for the EIB loans and also signed a Financing Agreement for the European Union grant, which will support the Egyptian Power Transmission Project.
“Increased electricity generation capacity and contribution to an efficient transmission network resulting from the projects signed today will contribute to economic prosperity of Egyptians across the country,” said Philippe de Fontaine Vive, European Investment Bank Vice President responsible for Mediterranean partner countries. “We welcome the two projects’ contribution to improved energy efficiency and enabling greater use of renewable energy in the country.
“Record European Investment Bank financial support both to Egypt and the Egyptian energy sector represent important milestones in the strong relationship between Egypt and Europe,” he said.
Ambassador Marc Franco, Head of the European Union Delegation to Egypt, said the realization of the Egyptian Power Transmission Project demonstrates the success of the EU’s Neighbourhood Investment Facility.
“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,” he said.
The €260 million EIB loan for the Egyptian Power Transmission Project forms part of a financing package under the Neighbourhood Investment Facility, alongside loans from Germany’s KfW and Agence Francaise de Developpement, as well EU grant funding.
This is the first project in Egypt where the EIB has led financing under the Neighbourhood Investment Facility.
Construction of the 1500 MW Giza North Power Plant will be supported by a €300 million EIB loan. The combined cycle gas fired plant 30km northwest of Cairo, to be operated by the Cairo Electricity Production Company, is expected to be commissioned in 2014. It is expected that the plant construction will benefit from technical assistance to promote more energy-efficient combined-cycle technology. The project will be financed by the European Investment Bank, World Bank and OPEC Fund for International Development.
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