Deutsche Bank, HSBC and KfW’s Ipex Bank have arranged €3.5 billion ($4 billion) in financing for state-owned Egyptian Electricity Holding Company to buy three gas power plants from Siemens, Deutsche Bank announced Tuesday.
The financing is for the Beni Suef, Burullus and New Capital combined cycle power plants in Egypt.
The three are syndicating the debt to a consortium of 17 international banks, with Deutsche Bank acting as coordinating bookrunner.
The financing is being underwritten by Germany’s export credit guarantee agency Hermes, and the loans are guaranteed by the Egyptian Ministry of Finance Ministry.
The first financing tranche for one of the three planned plants – part of Siemens’ biggest-ever single order – was secured in November.
German technology expert Siemens will deliver its latest generation of gas turbines to Egypt for the three high-efficiency power plants. The total investment cost for the three power plants will run to €6 billion.
KfW IPEX-Bank assumes an additional role as Hermes Agent and Facility Agent. The co-ordinating bank for environmental and social project due diligence for the Beni Suef and Burullus power plants is Deutsche Bank. HSBC is acting as environmental co-ordinator for New Capital.
The mandate was awarded in June last year following a memorandum of understanding signed by Siemens and Egypt at the Sharm-El-Sheikh conference in March of the same year and Egyptian President Abdel Fattah al-Sisi’s subsequent state visit to Germany.
In November, the loan agreement was signed for the first project in Beni Suef. March then saw the financial close for the other two power plants, Burullus and New Capital. The loans are guaranteed by the Egyptian Finance Ministry.
The core component of each of the natural gas-fired combined cycle power plants, which are to be built at three different locations across the country, will be eight latest-generation Siemens gas turbines.
The H-Class, as it is known, is a maximum efficiency turbine, thus providing not only a reliable energy supply but also a greener one.
The three large power plants, all of the same design, will each have a 4,800 megawatt production capacity, with a combined capacity of 14.4 gigawatts.
Upon completion in 2018, they will be the largest in the world. The projects will boost Egypt’s electricity production by 50 percent and make a significant contribution to the country’s national economic development.