Japan’s Marubeni eyes Egypt’s largest power plant deal – report
Japanese trading house Marubeni may help build Egypt’s largest power plant, a project equivalent to a tenth of the country’s generating capacity and expected to cost more than 400 billion yen ($3.54 billion), Nikkei Asian Review reported Monday.
Prime Minister Shinzo Abe and visiting President Abdel Fattah al-Sisi agreed Monday on Japanese corporate involvement in some 2 trillion yen worth of endeavors in Egypt.
The two leaders issued a joint statement in which Japan offered roughly 41.1 billion yen in official development assistance for Egyptian electric power infrastructure.
Abe’s government has sought to promote infrastructure exports and is looking to build on its success in India, which has chosen Japanese bullet train technology for a high-speed-rail project. Tokyo sees Egypt — the Middle East’s most populous nation, home to 90 million people — as a promising market whose economic development can contribute to regional stability.
Marubeni and Egypt’s state-run electric utility will sign a memorandum of understanding Wednesday, the final day of al-Sisi’s visit to Japan, on a feasibility study for the proposed 4-million-kilowatt coal-fired power station. An assessment of the project’s financial viability and a decision on whether to begin construction are to be made within a year’s time.
The utility would be expected to operate the completed plant, but Marubeni would likely provide assistance for the first five years.
To alleviate the country’s chronic power shortages, the Egyptian government plans to raise generating capacity to 83 million kilowatts by 2022 — a 160 percent increase over 2014. About 12 million kilowatts of this new capacity is to run on coal.
Anticipating the buildup, Japanese trading house Itochu and the Egyptian state power company will sign a memorandum of understanding Wednesday on a feasibility study for a coal supply arrangement that would begin once the plant is completed. Itochu envisions such a supply deal generating tens of billions of yen in annual sales.
Trading house Mitsubishi Corp. and Mitsubishi Heavy Industries are expected to sign similar agreements with the Egyptian government to explore the possibility of building a total of 1.3 million kilowatts of natural-gas-fired combined-cycle generating capacity.
JFE Steel, together with Japanese trader Marubeni-Itochu Steel, recently took a roughly 15 percent stake in top Egyptian steel plate producer Kandil Steel. The estimated investment of more than 1 billion yen marks a full-fledged entry into a market where demand for steel is expected to grow more than 5% a year. The JFE Holdings unit aims to double its sales in the region within several years.
