FEMIP, the European Investment Bank's financial arm for the Mediterranean, has granted a EUR 275 million loan to the Syrian Arab Republic for the extension of one of the country's main power stations.
The loan will be used for the construction of a 750MW natural gas-fired combined cycle power plant located some 25km south of Damascus. The project constitutes an extension of the Deir Ali I power plant, currently under commissioning and also partly financed by the Bank. The project will be implemented and managed by the Public Establishment for Electricity Generation and Transmission Company (PEEGT).
This project responds to the rapidly increasing demand for electricity in Syria, which is estimated to require an additional 5 500 MW of new generation capacity over the period 2008-2012. The Deir Ali II power plant will produce electricity at a competitive cost and with a relatively low environmental impact. The generation of electricity with a higher efficiency than the existing Syrian power plants and the use of natural gas as fuel will serve to produce significantly lower levels of CO2 emissions and airborne pollutants than with other fossil-fuel based alternatives, thus contributing to the implementation of Syrian and European policies in the areas of energy efficiency and climate change.
This is the third electricity generation operation signed by the EIB in Syria, confirming FEMIP's long-standing support for this critical sector of the Syrian economy. Since 2000 the EIB has committed almost EUR 1.3 billion of long-term loans to both public and private sector projects in Syria.
Background information
Combined cycle gas turbine technology: The leading edge technology used at the Deir Ali power plant combines a gas-fired turbine with a steam turbine, which produces additional electricity from the heat recovered from the gas turbine. It is therefore highly energy efficient and environmentally-friendly.
FEMIP, the Facility for Euro-Mediterranean Investment and Partnership, is the European Investment Bank's financial arm for the Mediterranean. Its remit is to promote the development of nine countries: Algeria, Egypt, Gaza/West Bank, Israel, Jordan, Lebanon, Morocco, Syria and Tunisia. Its two investment priorities are support for the private sector, the engine of sustainable growth, and the creation of an environment conducive to investment, by means of efficient infrastructure and appropriate banking systems. FEMIP has established itself as the main financial partner for the Mediterranean region, with more than EUR 7 billion invested since 2002. It encourages dialogue between the two shores of the Mediterranean at the institutional level but also with representatives of the private sector and civil society and carries out field studies financed by its Trust Fund, which is supported by certain EU Member States, in order to constantly increase its understanding of the challenges facing the Euro-Mediterranean region.