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The E uropean Bank for Reconstruction and Development (EBRD) is expected to approve a USD 125 mn loan on 4 October to finance the “superstructure and purchase of equipment” for Damietta Port’s second container terminal, according to a disclosure on the lender’s website.
This is a third of the total financing package: The loan is part of a USD 455 mn financing package involving the EBRD, the Asian Infrastructure Investment Bank (AIIB), Deutsche Investitions und Entwicklungsgesellschaft (DEG), the International Finance Corporation (IFC), and the French Development Agency’s private-sector investment arm Proparco, according to EBRD’s website.
A consortium of European companies are working on the project: Hapag-Lloyd, Eurogate Terminals, and Contship Italia signed an agreement with the Damietta Port Authority last year for the USD 665 mn project. The firms will establish the terminal under a 30-year build-operate-transfer framework. The terminal will have a final capacity of 3.3 mn TEUs and is expected to begin operating by 2024, raising the port’s total capacity to 4.7 mn TEU by the third year of its operation.
Where the money’s going: The loan will finance the construction of the terminal, the cargo handling equipment, and workforce training. The port authority is handling the dredging and quay wall constructions and are not being financed by the lender, according to the disclosure.
This is a 100% private-sector venture: The three European companies will collectively own 98% of the joint venture, with Hapag-Lloyd holding 39%, and Eurogate and Contship Italia each owning 29.5%. Two Egyptian private sector firms — Middle East Logistics & Consultants and Ship & CREW Egypt — each hold a 1% stake.
GOOD NEWS FOR POWER PRODUCERS-
Have we just taken a step toward a proper “wheeling” framework? The EBRD is advising the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) on opening the local electricity market to the private sector, the Electricity Ministry said Thursday. Funded by a grant, the multilateral lender is working with Egyptera to improve its regulatory framework to promote a more competitive market and increase the private sector’s role in producing, distributing and selling power, it said.
Why this matters: Private-sector players have long been asking for the ability to use the state’s electricity grid to transmit electricity to their end clients. Today, clients operating solar and wind facilities generate electricity and sell it to the state under a long-term offtake agreement. Energy producers wish they could effectively “rent” the state’s grid: Use it, for a fee, to green electricity directly to their end clients. In industry speak, that’s called “wheeling.” We’ve spoken of this before here and here.
