Egypt and the Arab Fund for Economic and Social Development signed on Monday two financing agreements worth US$362 million for electricity sector.
Egypt’s Prime Minister Ibrahim Mehleb witnessed the signing ceremony on Monday with officials from the Arab Fund for Economic and Social Development (AFESD). The two agreements comprise a US$200 million deal to finance a power station in Egypt’s Assiut city and US$162 million for a power grid project between Egypt and Saudi Arabia.
Egypt’s Planning Minister Dr. Ashraf Al-Araby has signed the two agreements with the AFESD’s Director General Abdulatif Al-Hamad.
The first agreement aims to increase Egypt’s electricity capacity by 650 MW.
Meanwhile, the US$162 million second agreement is designed to finance the power grid project between Egypt and Saudi Arabia.
Last December, Egypt and Saudi Arabia signed three agreements for the implementation and operation of a $1.6 billion electricity grid project.
The project is scheduled to begin in 2014 and to be completed by 2016.
The project will link the Arab region’s two largest electricity-generating bodies, with an estimated production capacity of some 3,000 megawatts of electricity at times of peak consumption.
Saudi Water and Electricity Minister Abdullah al-Hussayen had said that each country would pay for project infrastructure in its respective territory, while the cost of a Red Sea cable linking both countries would be shouldered equally by both sides.
Former Deputy Prime Minister Ziad Bahaa al-Din announced late last year that the Arab fund had agreed to provide Egypt with a $362 million loan, of which $162 million would be allocated for the project.
Since the beginning of its activity in development projects in Egypt in 1974, the AFESD’s total contribution to Egypt’s economy stands at around 1.2 billion Kuwaiti dinars (roughly $4.5 billion), according to the latest reports by Egypt’s Ministry of International Cooperation.