Ten Egyptian banks sign $1.2bn loan deal for Siemens power plants
A group of 10 major banks has signed one of the biggest financing deals in Egypt’s energy sector, amounting to 10 billion Egyptian pounds (US$1.2 billion). The loan will partially go for financing the country’s three new power plants with a combined capacity of 14,400 megawatts.
The consortium encompasses ten banks, namely the National Bank of Egypt (NBE), Banque Misr (BM), Commercial International Bank (CIB), QNB Alahli, Arab African International Bank (AAIB), Bank Audi Egypt, AlexBank, Egyptian Gulf Bank (EGB), Ahli United Bank, and National Bank of Abu Dhabi (NBAD).
The Egyptian Ministry of Electricity and the state’s largest lender, the National Bank of Egypt (NBE), have signed the contract on behalf of the aforementioned parties.
The new power stations, located in Beni Suef governorate south of Cairo, north of Borolos Lake in Kafr El Sheikh governorate, and in Egypt’s new administrative capital, will be constructed by German industrial giant Siemens and its Egyptian partners, Orascom Construction and El-Sewedy Electric.
The plants, which cost a total of €6 billion Euros ($6.5 billion), are expected to start operations in December 2016 in order to enhance the national electricity grid and meet new investment energy demands.
Last November, Egyptian government signed a financial closure agreement with German industrial giant Siemens, Orascom Construction, and El-Sewedy Electric to fund the construction of three electricity production undertakings. Upon the agreement, the banking consortium, which includes Deutsche Bank, HSBC Germany, and German Bank of Reconstruction (KFW), will secure €4.1 billion in finances, equivalent to 85 percent of the total cost of the three Egyptian projects, which amounts to €6 billion.
In June, Siemens signed contracts worth €8 billion with the Egyptian government for high-efficiency natural gas-fired power plants and wind power installations that will boost Egypt’s power generation capacity by more than 50 percent, compared to current capacity.
