EIB to extend €115m loan to Egypt for power generation

The European Investment Bank (EIB) is expected to sign a 115-million-euro loan with Egypt during this year to establish a wind farm in the West Bank of the Gulf of Suez, some 400 kilometers southeast of Cairo, said EIB President Werner Hoyer.

In an interview with MENA, Hoyer said the loan will help meet growing electricity demand and is also very much in line with the commitment to supporting climate action projects outside the EU.

"We would also like to continue to help develop Egypt's private sector which has had strong support in 2015," he added.

"There are a number of important operations ongoing and others in the pipeline with different initiatives ranging from micro-finance to support start-ups and SMEs in partnership with major public and private banks in the country," he said.

The EIB is also holding talks with Egyptian officials on how the bank could help them deal with the problem of the shortage of foreign currency, where many local businesses have no or only limited access to foreign currency that is so much needed for usual trade transactions, Hoyer went on to say.

Hoyer further said that this financial support will help create jobs, long term growth and vitally at the moment - hope.

"This is so important right now. Hope and economic development, must be a key goal," he stressed.

Asked about the most important cooperation projects between Egypt and the EIB, Hoyer said that the bank is a project-driven institution.

"This means that we assess carefully the projects that are submitted for financing in terms of their economic, financial, environmental and social impact," he said, adding that "We want to make sure that the projects we finance make a difference for the better."

"The bank itself will respond to what Egypt identifies as its needs and priorities. This is how we operate all over the region," he added.

"At the same time, as the EU's bank, we are driven by the European Union's external policies in the neighborhood and the priorities identified with Egypt," he said.

Investment in energy and in particular the renewable sector is a priority both for Egypt and the EU's external policy, he said, noting that the bank provided a loan of 600 million dollars for the Damanhour Combined Cycle Gas Turbine Power Plant.

The project involves the construction of a Combined Cycle Power Plant (CCPP) with a total installed capacity of 1800 MW in the Nile delta area of Egypt, some 5 km northwest of Damanhour town, he added.

This will strengthen electricity generation capacity to cater for increasing demand with modern and high efficiency units that will partly replace smaller and less efficient production capacity, he noted.

It will also ensure electricity production with significantly lower CO² emissions compared to fossil-fuel based alternatives, he said.