The European Investment Bank (EIB), the European Union's financing institution, is providing EUR 150 million (1) in the form of a long-term loan to the Egyptian Electricity Holding Company (EEHC), for the construction of a natural gas-fired combined cycle power plant, located in the north of Cairo.
EEHC is responsible for the generation, transmission and distribution of electricity throughout Egypt. Incorporated in 2000 as a private company wholly owned by the Egyptian State, EEHC owns and operates a unified power system interconnected with Libya and Jordan.
Expected to enter commercial operation in 2005, the 650 MWe plant will use combined-cycle gas turbine technology with a high electrical generating efficiency and low environmental impact for meeting growing electricity demand. It is designed to burn either natural gas, or distillate fuel as emergency back-up. The Egyptian Natural Gas Company (GASCO), also financed by the EIB, will supply domestic natural gas.
This is the ninth EIB loan for the electricity sector in Egypt since 1979. EIB funds have contributed towards financing two thermal power stations and electricity interconnection/transmission projects around Cairo, in Upper Egypt and Alexandria.
The EIB established in 1958 under the Treaty of Rome, finances capital investment projects, which further European Union policy objectives. It also helps implement the EU's co-operation policies towards third countries. In the Mediterranean region the EIB operates under the Euro-Mediterranean Partnership, which complements the EU Member States' own bilateral co-operation policies. Under the second financing mandate of the Euro-Med Partnership covering the period 2000-2006, the EIB is to provide EUR 6 425 million for projects in the 12 Mediterranean countries, which have signed co-operation or association agreements with the EU. The EIB is giving a particular focus to supporting efforts to develop a more open economy and to assist companies in preparing for market liberalisation, with a view to the progressive establishment of a free-trade area with the EU.
Since 1978, the EIB has lent some EUR 2 billion for investment in Egypt, with an emphasis on infrastructures, environmental projects and the support of industrial development through direct loans as well as global loans to the Egyptian banking sector for SME investment.
(1) 1 EUR: 0.915800 USD , 3.84915 EGP.