Washington D.C., April 4, 2001—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.