Egypt power plant loans secured

16 September 2015

Development banks agree finance deals for 1,800MW plant

  • Development banks approving loans for $1.3bn Damanhour power plant
  • European Investment Bank is approving $600m loan
  • European Bank for Reconstruction & Development expects to approve $200m loan in November

The London-based European Bank for Reconstruction & Development (EBRD) has agreed a $200m loan for the 1,800MW Damanhour combined-cycle power plant in Egypt.

It is expected to be approved by the bank’s board in November.

MEED reported in June that development banks were negotiating with the project’s owners, Egyptian Electricity Holding Company (EEHC) and West Delta Electricity Production Company (WDEPC). The Luxembourg-based European Investment Bank is also in the process of approving a $600m loan for the power plant.

The latest financing plan for the $1.3bn project is:

  • Egyptian Electricity Holding Company / West Delta Electricity Production Company – $240m of equity
  • European Investment Bank – $600m
  • Arab Fund for Economic & Social Development – $200m
  • European Bank for Reconstruction & Development – $200m
  • African Development Bank – $80m

The main contract to build the power plant was tendered in early 2015.

Development banks are taking a leading role in financing Egypt’s power investment. The Ministry of Electricity & Renewable Energy (MOERE) aims to install 54GW, or 6.5GW a year, until 2022, but lacks the financial resources to fund the new generating capacity directly.

The capacity-building drive is needed to meet fast-growing demand. Peak demand in the country is expected to rise at about 6 per cent a year between 2014 and 2022.

One of the financiers of the Damanhour plant, the Kuwait–based Arab Fund for Economic & Social Development (AFESD), has also provided a 25-year KD60m ($199m) loan for the 650MW Cairo West power plant. Other financiers were the Islamic Development Bank with $222m, the Kuwait Fund for Arab Economic Development with KD30m and the Saudi Fund for Development with $100m.

The MOERE announced in August that it would begin tendering packages on the Cairo West project.

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