Cairo, Asharq Al-Awsat—Tenders for subcontractors involved in the Saudi–Egyptian electricity grid project will be held later than initially planned, but the project is progressing on schedule, according to Gaber El-Desouky, the president of Egypt’s state-owned electricity company.
Speaking to Asharq Al-Awsat, Desouky said: “Preparations are under way to hold bids for the Saudi–Egyptian electricity grid project, with the aim being to hold the bids by December.”
This contradicts previous statements by the country’s electricity and energy ministry in December 2013, saying the bids would be held in early 2014 and construction would begin in 2015, with the project due to be finished the next year.
The terms of the agreement between the two countries stipulate that the project be owned and operated by both their state-owned electricity companies—the Egyptian Electricity Holding Company and the Saudi Electricity Company—but allow for subcontractors to be hired to construct certain elements of the project.
The 1.6 billion US dollar-project will allow both countries to generate and share an additional 3,000 megawatts of electricity during peak consumption hours via a 12-mile (20-km) underwater cable crossing the Gulf of Aqaba.
The project also comprises three power stations in Tabuk, Cairo and Medina, which will be linked via a 777-mile long (1,250-km) land cable.
Both countries will put up half the funding for the project, with Egypt using funds from excess loans allocated for electricity to cover part of its share.
The rest of Egypt’s share is due to come from a number of development finance institutions (DFIs) including the African Development Bank, the Arab Bank for Economic and Social Development, as well as the World Bank and the European Investment Bank.
Speaking to Asharq Al-Awsat last month, a senior figure at the African Development Bank denied it was pulling its funding from the project, after rumors circulated it was halting all investments to Egypt following the ouster of former president Mohamed Mursi in July.
Desouky had previously said that France’s development agency had offered to fully fund Egypt’s share of the project’s costs, and that meetings would be held by the project’s administrative committee on the Egyptian side to discuss the prospect.
Last week, the interim Egyptian government announced in a press release that it had signed agreements with the Kuwait-based DFI—the Arab Fund for Economic and Social Development—to finance a number of electricity projects, including the 200 million dollar-upgrade of a power station in Assiut, which will increase Egypt’s electricity production by 650 megawatts.
In the release, the government said the Saudi–Egyptian grid project would be part of a larger electricity linkage project between Egypt and Gulf countries.