Washington D.C., April 4, 2001
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The International Finance Corporation has signed agreements to lend US$395 million for the construction and operation of two power projects aimed at boosting Egypt’s electricity output. Together, the projects represent by far the largest private power investments in Egypt to date and will amount to 10% of the country’s current installed capacity.
The Suez Gulf and Port Said East power projects, each consisting of a 682.5 megawatt steam generation plant, will provide energy over a 20 year period to the Egyptian Electricity Holding Company. The power plants, to be located on the western coast of the Gulf of Suez and on the Mediterranean coast, respectively, will use natural gas as primary fuel, but will also be able to burn fuel oil as a back-up fuel. The projects, which are expected to reach commercial operation in 2003, will provide a long-term source of low cost power for Egypt’s consumers and industries in a time of growing electricity needs.
The cost for Suez Gulf and Port Said East is estimated at $335 million and $340 million, respectively. IFC will provide to the projects total loans for its own account of up to $90 million and total syndicated loans of up to $305 million for the account of participant banks.
Francisco Tourreilles, Director of IFC’s Power Department, said IFC’s financing of the Suez Gulf and Port Said East power projects supports the Egyptian government’s policy of encouraging private sector participation in the country’s generation sector. He added that these projects will serve as a model for other power generation projects in the region.
The project sponsor is Electricité de France International (EDFI), a wholly owned subsidiary of Electricité de France. Established in 1992, EDFI invests in power generation, transmission, and distribution outside France.
IFC, together with Barclays Capital, Crédit Lyonnais, and Société Générale, are Joint Arrangers of the combined $305 million syndicated loans for the two projects. IFC’s umbrella is a key factor in mobilizing funds from commercial banks for the 17 year tenor proposed for the syndicated loans, which is the longest maturity under the IFC syndications program to date. The loans for IFC’s own account have a 19 year tenor.
The projects are designed to meet both the environmental requirements of Egypt and those of the World Bank Group.
The mission of IFC, part of the World Bank Group, is to promote sustainable private sector investment in developing countries as a way to reduce poverty and improve people's lives. IFC finances private sector investments in emerging markets, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
