EBRD Grants €165 Mn Sovereign Loan to Enhance Egypt's Electricity Transmission Network
First Bank
The European Bank for Reconstruction and Development (EBRD) has announced a sovereign loan of €165 mn to the Arab Republic of Egypt, intended for the Egyptian Electricity Transmission Company, a state-owned entity.
The loan will be used to finance the development and enhancement of the electricity transmission network in Egypt. The funds will be utilized to upgrade a 500-kilovolt substation in Cairo, crucial for the stability of the network and related to the closure of a gas-operated power station (Shubra El Kheima) as part of Egypt's Water-Food-Energy Nexus initiative.
Additionally, the loan will support the construction of a 200-kilometer-long High Voltage Overhead Line (OHL) to transmit 2.1 gigawatts of renewable energy from the Gulf of Suez region, where several wind energy projects are under development or construction.
This project marks the first investment in the network under a $2 bn investment program implemented by the Egyptian Electricity Transmission Company as part of the NWFE initiative.
The project aims to unlock Egypt's renewable energy potential by addressing a key obstacle hindering the deployment of more renewable energy sources. Expanding and upgrading the old transmission and distribution network is vital to enable Egypt to achieve its long-term strategy of obtaining 42% of peak electricity from renewable sources by 2030.
The measurable benefits of the project include connecting new loads and reducing network losses, while the immeasurable benefits include relieving the overload on neighboring substations, improving voltage profiles, and enhancing system security.
The total project financing will amount to €200 mn, divided between a €165 mn loan from the EBRD and a €35 mn grant from the European Union (subject to EU approvals).
Up to € 120 mn of the mixed facilities (60% of the total funding) will be used to finance the 200-kilometer-long overhead line, while the remaining €80 mn (40% of the total funding) will be used to upgrade the high-voltage substation.
