The European Investment Bank (EIB), the European Union's financing institution, is providing EUR 150 million in the form of a long-term loan to the Egyptian Electricity Holding Company (EEHC), for the construction of a greenfield natural gas-fired combined cycle power plant, located in the Nile delta, south of the El Nubariya and El Nassery canals.
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 2007, the 650 MWe plant will be owned and operated by the West Delta Generation Company, which is wholly owned by EEHC. It 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 second loan provided by EIB to EEHC for combined-cycle power generation since 2001, after Cairo North Power Plant, and the tenth EIB loan for the electricity sector in Egypt since 1979. EIB funds have contributed towards financing thermal power stations and electricity interconnection/transmission projects around Cairo, in Upper Egypt and Alexandria.
In 2001, EIB lending in the Mediterranean Partner Countries (MPC) reached a record EUR 1.5 billion, confirming the position of the EU's financing institution as a major player in the economic development and stability of the region in which it has been operating since 1974.
In the wake of the Barcelona European Council (15/16 March 2002), the EIB is set to step up its cooperation with the MPC by establishing a Euro-Mediterranean Investment and Partnership Facility (EMIPF), along with operational offices in the region. The EMIPF, scheduled to enter into effect in autumn 2002 and associating the beneficiary MPC in the shaping of its activity, will enable the EIB gradually to expand its annual lending in the region from EUR 1.5 billion to EUR 2 billion.
In qualitative terms, the EMIPF will attach initial priority to private-sector projects with the dual aim of liberalising the economies of the MPC and harnessing their potential with the Customs Union in prospect between the EU and the MPC by 2010; the EIB's goal is to increase to 33% the share of private-sector ventures in relation to overall financing. The EMIPF will also place emphasis on social-sector projects, especially in the fields of health, education and environmental protection, stabilising factors in promoting the emergence of productive investment.