World Bank approves USD585m for Egypt power project
The World Bank Board of Executive Directors has approved USD585.4 million for Egypt’s Helwan South Power Plant Project, which will see the development of a gas-fired power plant that will contribute 10% of Egypt’s new electricity generation by 2018. The total project cost is estimated at USD1,785 million.
The World Bank says in a statement that Egypt has experienced rapidly growing electricity demand due to population growth, development of energy-intensive industries, and the use of electrical household appliances particularly air conditioning, which has increased significantly in the last few years. Investments have not kept up with the annual 6% growth in demand and there have been rolling blackouts and service interruptions of up to 14 times a month. This has had a negative impact particularly on small enterprises and among consumers who have expressed wide dissatisfaction with the increased frequency of electricity outages.
“The World Bank is committed to helping Egypt rebuild public confidence in the power sector by supporting critical investments like Helwan South,” said Inger Andersen, World Bank Vice President for the Middle East and North Africa region. “This gas-fired plant will help Egypt meet its growing electricity demands and ensure access to reliable services that are critical for the country’s economic growth and job creation.”
The project is part of a broader programme which aims to help the country address energy policy issues as well as meet the growing electricity demand in a sustainable manner. This includes investments in power generation, transmission and distribution, energy efficiency and subsidy reform. The infrastructure of the Helwan South Power project includes a 1950MW supercritical steam technology power plant fueled by natural gas and associated gas pipelines. The additional electricity generated by Helwan South will be distributed to grid-connected consumers throughout the country.
“The project is designed to improve the stability of the power system and reliability of electricity supply,” said Hartwig Schafer, World Bank Country Director for Egypt, Yemen and Djibouti. “Helwan South will boost the use of cleaner fuel by utilizing natural gas. It will displace older and less efficient generation and reduce emissions.”
The project will also provide short-term opportunities and long-term development needs. Around 4,000 jobs will be created, 75% during construction and the rest for plant operation and maintenance. In the broader economic context, Helwan South will help create indirect employment opportunities and boost economic growth.
The project is complemented by technical assistance and advice in critical areas of the power sector including utility governance, energy pricing, and subsidy and social safety net reform. Attracting private investment and advancing energy efficiency and renewable sources will also be addressed. An important example of the technical assistance is a focus on transparency and social accountability for which tools will be introduced to strengthen consumer feedback and the accountability of service providers through “citizen report cards.” This mechanism will enable better targeting of coverage, identification and assessment of service quality, delivery, and performance gaps. The technical assistance and advice is mostly funded by Deauville Partnership and the European Union.
The World Bank, the largest co-financier, has deepened its partnerships with several regional and international players to finance Helwan South Power Project including: the Arab Fund for Economic and Social Development, Islamic Development Bank, Kuwait Fund for Arab Economic Development and OPEC Fund for International Development (OFID).
The World Bank is an important development partner in Egypt’s energy sector through policy dialogue and project financing in conventional and renewable energy generation scaling up the development of wind and solar power plants. The Global Environment Facility (GEF)-financed solar-thermal El-Kureimat power project in 2006 included the first concentrated solar power plant in Egypt and one of the first integrated solar-thermal power projects in the world. In 2010, the Board approved the Clean Technology Fund and IBRD-financed Wind Power Development Project to support the development of power transmission infrastructure to connect privately-financed wind power plants in the Gulf of Suez.