Egypt to build private power plant north of Cairo

19 January 2010

Independent power project will have capacity of 750MW

Egypt’s first new independent power project (IPP) in ten years will be located at Benha, 48 kilometres north of Cairo, according to a local industry source.

The 750MW combined cycle power plant is the first in a series of five IPPs which Cairo is considering developing.

A plan for all five has been put to the Egyptian Electricity Holding Company (EEHC) by a Gulf investor which wants to develop the plants. However, Cairo will invite other interested developers to discuss any rival proposals before making a decision.

EEHC is expected to formally seek alternative proposals for the first project in March. Financial close is targeted for June.

Together, the five projects will have a capacity of 3,500MW.

The EEHC will buy most of the output of the first plant, but the developer will also enter into direct bilateral agreements with private consumers for some of the power output.

It will be the first time that Cairo has allowed producers and consumers to trade power directly and bypass the government. The new approach is part of wider plans to develop a competitive electricity market.

A new electricity law, which will govern the transition process, is likely to be passed in the first half of 2011.

The legislation is currently with the cabinet, which will then pass it on to parliament for approval.

“Even if it passed [by the cabinet] during this parliamentary session, it will not have sufficient time to be discussed in the parliament,” says Hafez el-Salmawy, managing director of the Egyptian Electric Utility & Consumer Protection Regulatory Agency.

Planned elections to the Shura Council, the upper house of parliament, in May will cut the parliament’s current session short.

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