The European Investment Bank (EIB), the EU's financing institution, announces a EUR 150 million long-term loan to the Egyptian Electricity Holding Company (EEHC) for construction of the second module for the Nubariya power plant. Located on the Nile delta 120 km north-west of Cairo near the junction of the El Nubariya and El Nassery canals, this will have an annual output of 4 550 GWh/a.
This loan follows on from an initial EUR 150 million granted by the EIB in September 2002 for phase one of this gas-fired combined-cycle plant, which is scheduled to enter into commercial operation in 2007. At the signing of this second loan in Cairo on 15 July, EIB Vice-President Philippe de Fontaine Vive commented: "This project will serve to meet the growing demand for electricity by both private and business users in the Cairo and Alexandria regions (up 7.7% in 2002 alone). It will facilitate the exploitation of an abundant domestic energy resource (natural gas) in line with Egypt's economic development objectives. The sustainability of such development will be enhanced by the fact that the project will be implemented in accordance with the EU's most stringent current environmental standards. I am also pleased to stress that this operation chimes fully with the goals of the Bank's new Facility for Euro-Mediterranean Investment and Partnership (FEMIP), one of whose priorities is to create an environment favourable to the growth of private enterprise".
Set up following the Barcelona European Council (15 and 16 March 2002) and inaugurated in October 2002, the top priority of the Bank's new Facility for Euro-Mediterranean Investment and Partnership (FEMIP) is to promote private sector development (especially SMEs) and projects helping to establish a propitious climate for private investment (economic infrastructure, health and education schemes). Endowed with EUR 8-10 billion up to end-2006, FEMIP's goal is to help the Mediterranean Partner Countries (MPCs) meet the challenges of economic and social modernisation and regional integration in the run-up to the planned creation of a Euro-Mediterranean free-trade area in 2010. Between October 2002 and June 2003, new operations worth over EUR 1.68 billion were approved under FEMIP, nearly 40% of which targeting private sector development.
The European Investment Bank has been active in Egypt since 1978, providing loans totalling over EUR 2.3 billion. These have focused on infrastructure, the environment and support for private enterprise involving both large joint ventures between local and European players and SMEs financed in partnership with Egyptian banks. In 2002, the EIB lent EUR 225 million in Egypt for extension of the Cairo metro and phase one of the Nubariya power plant.
Operation of the Nubariya plant will be entrusted the "West Delta Electricity Production Company", which is wholly owned by EEHC. The Egyptian Natural Gas Company (GASCO), which has also benefited from EIB loans, will supply natural gas produced within the country. EEHC is responsible for generating, transporting and distributing electricity throughout Egypt. Incorporated in 2000 as a private-sector company wholly owned by the Egyptian State, EEHC owns and operates an integrated electricity network that is interconnected with those of Libya and Jordan. The EIB has already granted nine loans to EEHC for power plants, network interconnection and electricity distribution projects in Upper and Lower Egypt and the Nile delta.