The Japanese consortium of Mitsubishi Heavy Industries (MHI) and Toyota Tsusho Corporation has been awarded a contract to supply equipment for Egypt’s South Helwan power plant.

The Japanese consortium will supply three sets of 650MW steam turbines and generators, with a total capacity of 1,950MW, for the South Helwan plant, owned by the Upper Egypt Electricity Production Company (UEEPC).

Construction of the plant is scheduled to begin in mid-2016 and the first units will be commissioned from early 2018.

Egypt has signed a loan agreement with the Islamic Development Bank (IDB) to provide £E2.75bn ($385m) to finance the cost of the steam turbines and generators. It is estimated the plant will have a total cost of £E12.5bn. The plant will be fuelled by natural gas.

Other co-financiers for the plant include the World Bank, the Kuwaiti Fund for Arab Economic Development and the Arab Fund for Economic and Social Development. Demand for electricity in Egypt has grown at a higher rate than the overall growth rate of the economy since the turn of the century, with the peak load rising from about 13,300MW in 2001 to 25,705MW in July 2012. The growth is a result of a number of factors, including the increased size of the Egyptian middle class, changes in housing patterns and the prevalence of subsidies.

UEEPC operates under the umbrella of the Egyptian Electricity Holding Company (EEHC), and covers the Egyptian capital city of Cairo and the surrounding areas.

Egypt’s utility sector operates on the basis of five-year plans to meet new capacity required for forecasted demand. The plan for 2012/13-2016/17 calls for the installation of 12,400MW of thermal capacity. Of this, 11,000MW will be commissioned during the plan years and 1,300MW is to be commissioned during fiscal year 2017/18. About 6,900MW will be executed by EEHC and its affiliated companies and the remaining 5,500MW by the private sector.