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AFD has allocated a EUR 50m loan to the Egyptian State to cofinance a project, in partnership with European donors, to reinforce the power grid, including substations, power lines and communication systems.
Context

Back in 2008, the Egyptian electricity holding company EEHC set out to address the power generation deficit faced by Egypt by setting ambitious targets to increase the installed capacity, which include raising the renewable energy power generation capacity to 20% of the total capacity by 2022. While almost the entire population (99%) is connected to the domestic power grid, the increase in installed capacity requires extending the network to connect new generation facilities.

The aim is, in particular, to install 4 GW of wind energy capacity in the Gulf of Suez region in the medium term. Egypt’s power grid is still partly managed manually, yet the automation of grid management and the reinforcement of power transmission infrastructure would make a substantial improvement to the energy efficiency of the grid. It would also lead to a more efficient allocation of capacity to areas where demand needs to be met.

Description

The project meets the two main objectives of:

  • Reinforcing the country’s power transmission infrastructure by contributing to automating load management;
  • Connecting the new wind farms in the Gulf of Suez.

The project involves acquiring and installing high-voltage and very high-voltage power transmission infrastructure, as well as a telecommunications network for the surveillance and control of the grid: construction of transmission lines and substations divided into lots.

European donors are providing almost half of the financing for this major national investment program, with EUR 380m. AFD is providing EUR 50m, with a subsidized sovereign loan, in addition to the loans from KfW, EIB, the EU grant, World Bank loan, the Clean Tech Fund grant, and the contribution from the Egyptian State. The EU grant is financing technical assistance for the contracting authority, the State-owned power transmission company (EETC), throughout the duration of the project implementation.

Impacts

The project addresses the energy challenge faced by Egypt today by:

  • Securing the integration of renewable energy generation into the Egyptian grid by connecting the Gulf of Suez wind farms.
  • Improving energy efficiency by reinforcing transmission infrastructure between the power generation and consumption area, and automating the management of load distribution thanks to the communication network.
  • Sustainably improving the performance of the power grid.
27/05/2010
Project start date
Sectors
Cairo
Location
50 000 000
EUR
Financing amount
Egyptian State
Beneficiaries