Egyptian Cabinet approved Thursday a loan agreement with Kuwait Fund for Arab Economic Development (KFAED) to finance the power interconnection between Egypt and Saudi Arabia.
According to the agreement, the fund is to provide Egypt with loan of KWD 30 million ($98 million) to assist in financing the power link between Egypt and Saudi Arabia (Egyptian Section) Project.
Earlier, an agreement related to arrangements for the implementation of the project was also signed between the fund and the Egypt Electricity Transmission Co. which is undertaking the project.
The Egyptian-Saudi interconnection aims at enabling the energy exchange between the Egyptian and Saudi grids during normal operation times, especially at peak time and during emergency conditions to enhance operation economics together with the reinforcement of the stability of both grids.
This 500 kV DC interconnection between both grids, which are the largest in the Southern Mediterranean region, starts at Badr in Egypt passing by Tabuk and ends at El-Madinah El Munawara in Saudi Arabia.
The project cost is estimated at KWD 519 million of which about KWD 200 million (EGP 4.76 billion) represents the cost of the project’s components in Egypt and of which KFAED loan covers about 15% of this cost.
The loan represents the 40th loan made by KFAED for the financing of projects in Egypt, as the fund already made 39 loans earlier with a total amount of about KWD 691 million ($ 2.3 billion).