Egypt says talks to sell power plants still in ‘early stages’: minister

Egypt says talks to sell three recently built power plants to private investors are still at an early stage, Electricity Minister Mohamed Shaker said on Tuesday.

The power plants, known at the time as the world’s biggest, were built by German industrial giant Siemens in a 6 billion euro ($6.7 billion) deal sealed in 2015. Egyptian President Abdel Fattah al-Sisi inaugurated them in July 2018.

“The negotiations are still in the early stages,” Shaker told Reuters by telephone. He declined to disclose further details.

Bloomberg reported on Monday that Blackstone Group and Edra Power Holdings of Malaysia had both expressed interest in taking over the plants and selling the electricity generated back to the Egyptian government, a move that would lower the country’s public debt.

A person with knowledge of the power plants’ financing told Reuters that a similar plan was broached last year to sell the plants either to investors or through an initial public offering, but nothing came of it.

“So I don’t know whether this one will progress. The only thing I know is that it would be complicated given the debt package in place,” the person told Reuters.

To finance the construction, Egypt brought in Deutsche Bank, HSBC Holdings, and KfW IPEX-Bank to structure and arrange the international portion and resorted to local banks to finance the Egyptian pound portion.

The government also brought in export credit agencies (ECA) to secure the facilities, Siemens said at the time.

In September, Egypt awarded a $352 million contract to Siemens and Siemens Technologies to manage the plants.

The three plants contributed to alleviate an acute power shortage marked by rolling power outages and cuts to industrial output in the years following Egypt’s 2011 uprising.