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Upgrades to electricity grid could get EBRD backing: The European Bank of Reconstruction and Development (EBRD) is considering providing a sovereign loan of up to EUR 165 mn to upgrade the country’s electricity transmission grid, the lender said on its website. The funds would be given to the Egyptian government for on-lending to the state-owned Egyptian Electricity Transmission Company (EETC). The approval date for the loan has been set as 13 December 2023.
Where will the funds go? The loan will finance the upgrade of a 500 kV substation in Cairo governorate that will enable the decommissioning of an aging gas-fired power plant in Shubra El Kheima. Smaller substations across the country are also set for upgrades under the plan. Funds will also be pumped into building a 200 km high-voltage overhead transmission line that will transmit some 2.1 GW of renewable energy from wind plants in the Gulf of Suez. Of the total loan, 60% will be dedicated to the construction of the transmission line, with the remaining 40% going to the 500 kV substation in Cairo and other smaller substations.
Remember: The EBRD is the lead partner in Egypt’s Nexus for Food, Water and Energy (NWFE) energy plan to which it pledged to contribute USD 200-300 mn. The money will be used to decommission 5 GW of gas-fired power plants by 2025 and establish 10 GW of solar and wind projects by 2028. NWFE’s energy project plans to mobilize USD 10 bn in private-sector investment and USD 500 mn in soft loans, grants, and assistance from donors and international financial institutions.
The EU may also be helping out: The project will require EUR 200 mn, with the remaining EUR 35 mn coming from EU grants, which will be subject to EU approvals, the lender wrote. Yet it’s still more than we expected, with local media reporting last week that the government was trying to secure a USD 150 mn loan from the EBRD as part of its NWFE program before the end of the year.
Part of a wider renewables project: The EETC is seeking funds to implement a USD 2 bn investment program that will upgrade the grid, phase out aging stations, and help Egypt reach its goal of having 42% of its electricity renewably generated by 2030 and 60% by 2040.
