The Facility for Euro-Mediterranean Investment and Partnership (FEMIP) is providing EUR 160 million to the Egyptian Electricity Holding Company (EEHC) for the construction of two 750 MWe natural gas-fired combined-cycle power generation modules, one at Talkha-Damietta power station in the Nile Delta and the other at El Kuriemat power station 90 km south of Cairo.
EEHC is responsible for the generation, transmission and distribution of electricity throughout Egypt. Incorporated in 2000 as a private sector company and wholly owned by the Egyptian State, EEHC owns and operates a unified power system integrated with those of neighbouring Libya and Jordan.
The projects, intended to meet the growing demand for power and scheduled to start commercial operation in 2007, will be implemented by EEHC's wholly-owned subsidiaries East Delta Power Production Company (Talkha) and Upper Egypt Electricity Production Company (El Kuriemat). They will employ combined-cycle gas turbine technology, which delivers high energy efficiency with low environmental impact. The turbines are designed to burn natural gas but can use distillate fuel as an emergency backup. The Egyptian Natural Gas Company (GASCO), to which FEMIP is also providing finance, will supply indigenously-sourced natural gas.
This loan complements the loan of EUR 220 million granted yesterday to the Spanish Egyptian Gas Company (SEGAS) for the construction of a liquefied natural gas (LNG) plant, storage facilities and gas export equipment in Damietta, some 60 km west of Port Said.
Loans in the Mediterranean partner countries (MPCs) are granted under the Facility for Euro-Mediterranean Investment and Partnership (FEMIP). This Facility focuses primarily on developing the private sector and financing social and economic infrastructure underpinning this development.
FEMIP is the culmination of a partnership between the European Union and its Mediterranean neighbours that goes back more than thirty years and was intensified in the 1990s to underpin the Barcelona Process launched at the Barcelona Conference in November 1995. FEMIP aims to help the MPCs in meeting the challenges of economic and social modernisation and enhanced regional integration, in line with the Wider Europe Neighbourhood Policy and in preparation for the establishment of a Euro-Mediterranean free trade area. It enables Europe to step up its cooperation with the partner countries. Thanks to this Facility, with its increased financial resources, the EIB has been able progressively to expand its lending in the region from EUR 1.5 billion to EUR 2 billion annually. FEMIP gives priority to financing private sector ventures, with the dual aim of liberalising the economies of the MPCs and developing their potential in the run-up to the planned creation of an EU/MPC customs union in 2010. It focuses on foreign direct investment and local private sector initiatives as well as social sector projects, particularly in the fields of health, education and environmental protection, with the aim of fostering social stability and productive investment.