WASHINGTON, February 16, 2006 - The World Bank today approved a US$ 260 million Power Project for the Republic of Egypt.
One of the main objectives of the El-Tebbin Power Project is to assist the Egyptian government in enhancing the supply of energy in a sustainable manner through investment in new generation capacity. It also aims at helping the government strengthen the performance of the power sector by engaging in policy dialogue and supporting measures aimed at improving financial performance and energy efficiency. It will also contribute to the development of the legal framework for the power sector, future gas and electricity pricing and further implementation of already undertaken reforms.
“This project represents a re-engagement between the Egyptian government and the Bank at a time when the government is making important steps on reforms in the power sector,” commented Anna Bjerde, the project’s Task Team Leader. “Our support is expected to contribute to the need for public financing of infrastructure as laid out in the Country Assistance Strategy,” Bjerde added, “but also to know-how and lessons learned from other countries on key sector issues related to energy efficiency in the power sector and development of regulatory and legal frameworks conducive to a liberalized power sector.”
The project includes two components:
- The El-Tebbin Power Plant component involves the construction of a 700 MW power plant comprising of two units of 350 MW steam turbines and boilers using natural gas as fuel.
- The technical assistance component will address key issues facing the sector such as the need for better financial performance, strengthening the pricing structure and energy efficiency.
The project is expected to have a significant positive impact on employment generation in the project area thus creating 2,000 additional jobs during the construction phase and 800 during the operation period. Moreover, the project is in line with the goals of the Egypt Country Assistance Strategy which include enhancing the provision of public goods through modernized infrastructure services to achieve higher growth. It is also supported by and supports the Bank’s 2003 Infrastructure Action Plan which underscores the central role of infrastructure in the economic growth and poverty reduction process.
The project will use a Fixed Spread Loan (FSL), with a 20-year maturity, including a five-year grace period. The loan will be issued by the International Bank for Reconstruction and Development (IBRD), an arm of the World Bank Group which provides loans and technical assistance to middle-income countries.