IFC, a member of the World Bank Group, is providing a $50 million loan to Cheiron Finance Limited, a subsidiary of Egypt’s PICO International Petroleum, in an effort to bolster energy supplies in the Arab World’s most populous state.

The loan is part of a $200 million financing package arranged by IFC, the European Bank for Reconstruction and Development, and HSBC. It will help PICO, one of Egypt’s leading independent producers, expand operations and optimize production at its oil and gas fields in the Gulf of Suez. Those fields help supply Egypt’s oil – and natural-gas-fired power plants, which provide the vast majority of the country’s electricity. The project is considered key in a nation where demand for electricity has more than doubled in the last 15 years, sparking power outages that have stymied economic growth, according to IFC.

“Oil and gas are vital components of Egypt’s energy mix,” said Hesham Elbosaty, treasurer of PICO International Petroleum. “By tapping into existing fields and developing new properties, we can help provide the fuel necessary to power the country’s economy.”

The loan is part of a larger effort by IFC to support Egypt’s energy sector.

“As a country, Egypt is brimming with potential, but it is being held back by severe power shortages,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. “By harnessing the country’s energy potential, we can spur economic growth and help bring opportunity to those who need it most.”

PICO International Petroleum is Egypt’s largest locally-owned oil and gas company. It specializes in developing the smaller, more mature concessions that are a vital component of the country’s oil and gas sector.

The financing provided by IFC is part of a larger effort to spur economic development across Egypt. During the 2014 fiscal year, IFC committed $130 million in the country. The investments brought IFC total commitments in Egypt to $1.1 billion since 2011, a figure that includes $392 million in mobilization from other investors.

Source: The Financial