Germany’s Siemens has sent contracts to operate and maintain power plants in Beni Suef, Borollos, and the New Administrative Capital to the Egyptian Electricity Holding Company (EEHC) for review before signing at the end of this month.
Sources at the EEHC told Daily News Egypt that the value of the contract will reach EGP 6bn, including a part paid in euros of €165m. The contract period is for eight years and will begin payment of dues after four years of completion of the contract.
The Ministry of Electricity has contracted Siemens to establish three power plants with a total capacity of 14,400 MW through an EBC + Finance system. Siemens handles design, construction, and financing, while the EEHC repays the loan over several years. Three German banks—KfW Development Bank, HSBC, and Deutsche Bank—secured funding for Siemens’ projects in Egypt, amounting to €4.1bn of a total contract value of €6bn. Arab banks secured the remaining funding in Egyptian pounds to pay for the Egyptian companies participating in construction, including Elsewedy Electric and Orascom.
The three stations would provide $1.2bn in fuel saving per year, with efficiency of over 60%.
According to the agreement, Siemens will operate and maintain all the components of the three plants. This agreement is different from another agreement to maintain the gas turbines in the three stations, which is worth €1.5bn.
The sources revealed that stopping the renovation project for electricity production units will save the state about EGP 4bn, given that surplus energy output had pushed the government to stop some production unit and put the running units on half capacity.
The Ministry of Electricity has put in place a plan that was launched last year to strengthen the transmission and distribution networks at an investment cost of EGP 40bn and signed financing agreements with local banks to finance the projects.
The Ministry of Electricity also aims to export energy to the Arab and foreign countries through the interconnection projects that are being agreed upon.
