The European Bank for Reconstruction and Development (EBRD) is considering allocating a sovereign loan of up to EUR 165 million (USD 174.4m) to support Egypt’s push to upgrade its electricity grid, including through the construction of a new line to handle future renewable power capacities.
The financing will be on-lent to the state-owned Egyptian Electricity Transmission Company (EETC), a recent notice on the lender’s website shows.
About 60% of the total proceeds will be used to build a 200-kilometre (124 miles) high-voltage overhead transmission line (OHL) that will help transport about 2.1 GW of renewable energy from the Gulf of Suez region, where several wind projects are currently under development or construction.
The rest of the proceeds will be used to finance the upgrade of a 500-kV substation in the Cairo governorate in Egypt to guarantee the stability of the network. The project, realised under Egypt’s Nexus Water, Food & Energy (NWFE) initiative, is directly linked to the closing of the Shoubra El Kheima gas-powered power plant.
The planned initiatives will mark the first grid investment under EETC’s USD-2-billion investment programme which aims at the decommissioning of 5 GW of existing and inefficient gas-based power generation capacity while easing investments to support the installation of 10 GW of new renewable energy capacity.
The EBRD is currently reviewing the loan application and has set December 13, 2023 as a deadline for a ruling.
In addition to EBRD’s funding, the EU is expected to provide a further EUR 35 million in grants for the initiative. The EU funding is subject to approval.
(EUR 1 = USD 1.057)