The Ministry of Electricity and Renewable Energy is holding talks with three foreign energy companies about $7.5b worth of contracts to add 6,750 MW to Egypt’s electrical grid, Daily News Egypt reported. The companies in negotiations are the Saudi ACWA Power, the British company Benchmark PLC, and the Emirati Masadar company.
The contracts are to finance the construction of three combined cycle power plants, according to Fouad Mansour, the Head of private sector project department at the Egyptian Electricity Holding Company (EEHC).
The first contract is intended for the Saudi company ACWA Power, which is to establish the Dairut power plant. The deal includes investments for the project at a total cost of $2.5b and a six-month operating bill. The Ministry of Electricity’s five-year plan – 2012 and 2017 – expects to add overall 2,250 MW to the Dairut power plant. This is the first project of its kind ever to operate under the build-own-operate (BOO) operation model. Under this framework, the investor will have the right to use the land for 25 years and to sign agreements with the Egyptian Electricity Transmission Company (EETC) to purchase the produced energy.
The ministry is also to launch negotiations with the British company Benchmark PLC about the construction of a second 2,300 MW combined cycle power plant in the Tobs area of Kafr Sheikh Governorate. The third deal is planned to be signed with ACWA Power and the Emirati Masadar to implement a 2,200 MW combined cycle power plant in western Damietta.
The contracts with Acwa Power are likely to be finalized in the coming weeks, according to Mansour, Trade Arabia added.