Egypt moves ahead with key power projects

03 July 2014

Energy projects top the agenda for Egypt’s new government with atomic power proposed as the main solution

While Egypt’s development has almost come to a standstill since President Hosni Mubarak was overthrown in early 2011, the award of a major power equipment contract to a Japanese consortium shows that vital projects are moving ahead.

Although political unrest has permeated all aspects of Egypt’s economy over the past three years, the necessity for new infrastructure has ensured the most important schemes are being forced through.

The newly elected President Abdul Fattah al-Sisi has put key infrastructure projects at the top of his new government’s agenda, including the country’s first Nuclear Power Plant, for which plans were originally devised 30 years ago.

Egypt has recorded some of the fastest demand growth for electricity in the Middle East and North Africa in recent years, with peak load almost doubling in the first decade of the century and forecasted to continue growing at rapid pace.

It is estimated an additional 30,000MW of capacity will be required over the next seven years to satisfy demand. The planned 1,950MW South Helwan plant shows there is still appetite for foreign investment in Egypt.

While it is unclear how the multibillion-dollar El-Dabaa nuclear project will be funded, the South Helwan plant is being backed by financing from Arab development banks, including the Kuwait Fund for Arab Economic Development.

It is not just Egypt’s utilities sector that international lenders are interested in. Contractors have been invited to bid for the third phase of Line 3 of the Cairo Metro, funded by the EU and the French Development Agency. The proposed Line 4 on the metro project will be funded by the Japan International Cooperation Agency.

The international commitment to Egypt’s development is evidence that, while the country has endured a difficult period, the economic foundations are there to ensure it remains an attractive proposition to regional and international investors going forward.

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