Electricity Ministry delays Al-Nowais electricity project to 2022-2027 plan

Mohamed Farag
3 Min Read

The Ministry of Electricity has decided to delay the implementation of Oyoun Moussa power plant to be contracted with Emirati Al-Nowais company to the 2022-2027 plan.

Sources from the Ministry of Electricity told Daily News Egypt that a note was sent by the ministry to the cabinet, briefing the Emirati company’s requests to sign the contract of the establishment of a coal-powered electricity plant with a 2,640 MW capacity in the area of Oyoun Moussa.

The sources added that Al-Nowais company officials and the financing banks objected to a number of items in the power plant contract, including arbitration in case of a dispute between the parties. In addition, the company has not agreed yet over signing a sovereign guarantee agreement with the Finance Ministry. This means that a promise to settle debts will be made by the Finance Ministry if the Egyptian Electricity Holding Company (EEHC) fell into trouble.

According to the sources, the Ministry of Electricity and representatives of Al-Nowais, as well as the US consulting office Black and Veatch are still negotiating to reach an agreement that satisfies all parties, despite the postponement of the project to the 2022-2027 plan.

The sources said that the ministry seeks to conclude the contracts perfectly to avoid a dispute between Egypt and the United Arab Emirates in case of any violation to the items of the contract.

The sources continued that the establishment of the coal station will take three to five years, noting that the Ministry of Electricity has a daily surplus production which amounts to 4,000 MW. After adding the production of the Siemens power plants in the New Administrative Capital, Borollos, and Beni Suef, the surplus production will increase to 8,000 MW.

The Ministry of Electricity has contracted with Belgian consulting office Tractebel Engineering Consultancy Company to assess the most suitable technical and financial offer across seven presented bids to establish a coal-fuelled power plant that will cost $10bn with a 6,000 MW output.

The sources pointed out that the coal-fired power plant planned to be established in Hamrawein area will also be postponed to the 2022-2027 plan, as the ministry is still examining the offers made by Arab and international companies. They added that negotiations will continue for a long time, as had happened in the negotiations of Al-Nowais power plant which lasted for three years.

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