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Egypt to invite private investors into electricity sector - ASHARQ AL-AWSAT English Archive
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The Agouza neighborhood, background, is seen during a power cut, in Giza, Egypt, Sunday, June 2, 2013. (AP Photo/Hassan Ammar)

The Agouza neighborhood, background, is seen during a power cut, in Giza, Egypt, Sunday, June 2, 2013. (AP Photo/Hassan Ammar)

Cairo, Asharq Al-Awsat—Egypt’s Minister of electricity Ahmad Emam said on Wednesday that Egypt was planning to solicit bids for new power plants from private sector investors.

He added that his ministry aimed at 6,250 MW of capacity to the national electricity grid under the existing Build, Own, Operate (BOO) scheme, as part of the government’s five-year plan. Emam said the project will take 24 to 30 months to complete.

Emam said these figures were represented in part by 2,250 MW from the Beni Suef electricity generating station using the combined-cycle system, and 200 MW from solar power, using photo-voltaic cells, by establishing 10 solar stations each producing 20 MW. Initial discussions on the projects are scheduled to begin with experienced local and foreign investors, who will be expected to provide proof of their expertise, later this month.

Last May, the Ministry of Electricity released the terms-of-reference handbook for companies which had already qualified to build the Daryut power plant, with a capability of 2,250 MW using the combined-cycle system. Another terms-of-reference handbook was produced for the construction of an electricity power plant, with a capability of 250 MW, using wind energy, in the Gulf of Suez.

The minister said a tender will be issued for the construction of Qena steam power plant to produce 1,300 MW of electricity during the next month. He added that the applicants will need to design, fund, construct, own and operate the plant, and sell electricity power to the Egyptian Electric Holding Company for 25 years, under an electricity purchasing agreement.

The minister added that these plants were part of the seventh five-year plan, covering the years 2012–2017, which the electricity sector endeavors to implement within the framework of an increase in demand for electricity.

Over the last two years, Egypt has witnessed a constant stream of disruptions of its electricity supplies because of increased consumption and fuel shortages at power plants, which it is trying to compensate for by building new power plants and increasing the efficiency of existing plants.

In addition, it also hopes to reduce an existing deficit in the Egyptian electricity grid, which stands at between 2,000 and 2,500 MW, with electricity grid linkage projects with neighboring states.

The Egyptian government has signed a memorandum of understanding on electricity linkage with Saudi Arabia in June, in a project worth USD 1.6 billion. The Saudi minister of electricity, Abdulah Al-Hossein, said the capacity of the link between the two countries will be 3,000 MW, adding that “it will be a major axis of Arab electricity linkage . . .to establish an infrastructure for electricity trade between Arab countries, in preparation for the establishment of an Arab electricity market, and equip it to link to the European electricity system.”