The European Investment Bank (EIB) has signed a €205m agreement to finance Shabab power plant, according to an official bank statement issued on Sunday.
The power plant will be converted to work with a combined-cycle system to increase its energy production by 50% without using additional fuel, bringing the plant’s output to 1,500 megawatts.
“Our aim is to support the new Egypt’s social and economic transition by financing projects encouraging growth and employment,” Vice President of EIB Philippe Fontaine said in the statement.
Investments in the project total $900m. In addition to EIB, the European Bank for Reconstruction and Development (EBRD), the Saudi Fund for Development (SFD), the Islamic Development Bank (IDB) and East Delta Electricity Production Company are all already contributing in financing the project.
The agreement was signed with the Central bank of Egypt (CBE) and the Egyptian Electricity Holding Company (EEHC).
Fontaine met on Sunday with Minister of International Cooperation Ashraf El-Arabai, where he expressed EIB’s interest in helping to fund a number of projects listed in the interim government’s programme for economic development and social justice, according to a statement from the Ministry of International Cooperation.
EIB is currently studying the prospect of funding projects in the renewable energy field, as well as financing the fourth phase of a third underground line. The bank also remarked that it is willing to fund the Brolos Lake development project with a contribution of € 77m.
During the meeting, El-Araby praised the EIB’s keenness to support Egypt’s “efforts for achieving development” in the current transitional period.
In 2013, EIB has signed several funding agreements in Egypt, such as a €600m agreement to finance the third phase of the third underground line, a €50m contract for developing air navigation control project, a €57m agreement for funding the second phase of improving water and sanitation services project and, in cooperation with the National Bank of Egypt, an €80m agreement to provide loans for small and medium enterprises.
EIB’s cooperation with Egypt dates back to 1977 and totals €6bn.