The European Investment Bank (EIB), the European Union's long-term financing institution, is lending a total of ECU 170 million (1) for water management and industry in Egypt.
A total of ECU 95 million goes for water management/irrigation of more than 250 000 ha in Upper and Middle Egypt, as well as a water storage power generation scheme, including the rehabilitation of the Naga Hammadi dam on the river Nile. The funds to the Arab Republic of Egypt will be made available in the form of two loans to the Ministry of Public Works and Water resources. Of this total amount:
- ECU 75 million is for the construction of a new dam on the Nile, in Upper Egypt, to replace an existing one built in the late 1920's, and a power station. Located some 12 km to the north of the town of Naga Hammadi, the new dam will support an irrigation system for 240 000 ha and hydro-power generation. Works will include a 66 meter high headpond, and a 170 metres long navigation lock with a width of 17 metres, a low level public road bridge of 310 metres length over the dam. The hydro-power component of four turbines (4X16 MWe) will also include a power house and a 220 kV transmission line of 23 Km to connect the plant with the national grid. Environmental aspects were carefully examined under an Environmental Impact Assessment, which established an Environmental Management Plan. This will be monitored by an Environmental Group set up for this purpose. The project is also benefiting from grants and other financing foreseen under the German-Egyptian bilateral cooperation.
- ECU 20 million goes for the rehabilitation or replacement of existing irrigation pumping stations, 150-250 Km south of Cairo, in Middle Egypt. The investment, concerning three independent irrigated areas supplied from the Yousfi canal, aims at preserving and upgrading irrigation of 18 500 ha and drainage of approximately 100 000 ha on the left bank of the Nile. It will lead to substantial energy savings and reduce water losses.
The projects form part of the Government's plans to upgrade irrigation and drainage to maximise the efficient use of Nile water and scarce land, as well as to prevent soil infertility, in view of a constant rural population growth and increasing demand for agricultural produce. Egypt's climatic conditions and flat topography make irrigation dependent on dams and pumping stations.
ECU 75 million is for financing the construction of a flat products steel plant by the Alexandria National Iron and Steel Company (ANSDK). Established in 1982 as a public/private joint venture between local and foreign investors, ANSDK operates an integrated steel mill located 15 km west of Alexandria.
Following the upgrading of its existing steel plant, supported with a previous ECU 40 million EIB loan, ANSDK is now diversifying into flat steel products to satisfy primarily the growing domestic market. The project includes the construction of an integrated, mini-mill type, steel plant, for producing thin-gauge, and hot strip in engineering grades. With a nominal capacity of 1 M t/a of liquid steel, the investment will be commissioned end of 2000. This investment is being co-financed with the World Bank and other donors.
The European Investment Bank (EIB) was set up in 1958 under the EC Treaty to provide loan finance for capital investment furthering EU objectives. It participates in the implementation of EU co-operation policies towards third countries that have co-operation or association agreements with the Union. In the Mediterranean region, the EIB operates under the new Euro-Mediterranean Partnership, which complements the EU Member States' own bilateral co-operation policies.Under the Partnership arrangements, the EIB is committed to lend up to ECU 2 310 million between 1997 and 2000 for investment projects in 12 non EU-Member Mediterranean countries.This loan follows a number of other loans committed by the EIB, making total financing since 1978 in Egypt exceed ECU 1 billion, to support projects in water supply and waste water treatment, telecommunications, transport, electricity transmission and distribution, agricultural development and industry, including SMEs.
(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31 March 1998, when ECU 1 = 0.64 GBP, 1.076 USD, 3.70610 EGP.