Cairo launches study into private power plants

15 January 2010

Independent power project will have capacity of 3,500MW

Cairo is studying plans to develop a series of independent power projects (IPP) at five sites around the country, to provide up to 3,500MW.

According to project sources, a prominent Gulf developer has approached the Egyptian Electricity Holding Company (EEHC) about the construction, financing, operation and maintenance of the power plants.

The Egyptian Electricity Holding Company (EEHC) is the client for the scheme, which was revealed on 11 January by the Public Private Partnership (PPP) Central Unit, part of the Finance Ministry. The EEHC is due to officially announce the project in March, with financial close scheduled for May.  

The PPP Central Unit declines to release any additional information about the project. However, a senior government source says that the EEHC will only buy part of the power output of the plant, meaning that any developer will have to also find other, private sector customers.

Cairo first announced plans to liberalise its electricity sector in 2008, and allow electricity producers and consumers to buy and sell power without government involvement. The plans are due to take effect from 2011 (MEED 15:05:09).

Egypt is expected to pass a PPP law in the near future, which may affect this project. Legislation is currently awaiting signature by President Hosni Mubarak. It will then go to parliament for approval.

To date, PPP projects have been tendered on the basis of an amendment to the Tenders and Procurement Law from 1998.

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