In a significant move towards Egypt’s energy transformation, the European Bank for Reconstruction and Development (EBRD) has approved a sovereign loan of up to EUR 165 million. This funding will be provided to the Arab Republic of Egypt, with the aim of upgrading and reinforcing the country’s electricity transmission grid. The loan will be on-lent to the state-owned Egyptian Electricity Transmission Company (EETC), responsible for managing Egypt’s medium- and high-voltage network transmission system.
The funds will be allocated to two key components of the project. Firstly, it will support the upgrade of a critical 500 kV substation located in the Cairo governorate. This substation plays a vital role in stabilizing the electricity network and is directly linked to the closing of a gas-powered power plant, Shoubra El Kheima, which is part of Egypt’s Nexus Water, Food & Energy (NWFE) initiative. The second component involves the construction of a 200 km high-voltage overhead transmission line (OHL). This transmission line will relay approximately 2.1 GW of renewable energy from the Gulf of Suez region. This region is currently the site of several wind energy projects under development or construction.
The project’s primary objectives are twofold. It marks the first grid investment under a USD 2 billion investment program to be implemented by EETC as part of the NWFE initiative. By doing so, it seeks to unlock Egypt’s vast renewable energy potential by addressing one of the major challenges hindering the expansion of renewable energy sources. Upgrading and expanding the aging transmission and distribution network is crucial to enable Egypt to realize its long-term strategy of having 42% of electricity generated during peak load come from renewable sources by 2030.
The project offers quantifiable and unquantifiable benefits. Quantifiable benefits include the connection of new electrical loads and the reduction of grid losses. Unquantifiable benefits encompass relieving overloading on neighboring substations, improving the voltage profile, and enhancing overall system security.
With an ETI score of 60, this project is aligned with the Green Energy Transition (GET) Direct Track. Sixty per cent of the loan proceeds will be dedicated to financing part of the 200 km overhead transmission line, facilitating the relay of around 2.1 GW of renewable energy from the Gulf of Suez region. This aligns with the growing wind energy projects in the area. The remaining 40% of the loan proceeds will be directed towards upgrading the high- and medium-voltage substations in various locations across the country, with precise GET finance determination during due diligence.
Furthermore, this initiative marks the first grid investment under the NWFE program, a policy dialogue initiative introduced by the EBRD at COP27 in Sharm El Sheikh. The NWFE initiative as a whole is expected to lead to a reduction of approximately 17 million tCO2 in greenhouse gas emissions annually.
The EBRD’s support and the EETC’s implementation of this project underscore Egypt’s commitment to transition towards a greener and more sustainable energy future.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
