On Thursday, the Egyptian Electricity Ministry signed a $28 million deal to construct a transformer power station in the Suez Canal region.
The project aims to support the country’s increased power demand during the summer months, said Ahmed Hanafi, head of the Egyptian Electricity Transmission Company.
The transformer project will be funded by the European Union’s European Investment bank.
Renewable energy in Egypt
The news comes as the North African country faces power challenges driving the government to enter into a variety of power purchase agreements to help support growing electricity demand.
In February 2015, government approved a new law privatising the electricity production, transmission and distribution sectors, which reduces the state’s role in the power sector. The unbundled entities will be seen as independent from each other to ensure a competitive market.
In addition to the restructuring of the electricity sector, government secured deals earlier in the year to integrate nuclear, wind, solar and coal into the country’s energy mix while in the process of finalising a 10-year plan that will see an additional 70GW added to the country’s electricity grid. The breakdown includes 8GW from coal and an additional 8GW from renewable energy sources.
Nuclear in Egypt
In February 2015, the Egyptian President Abdel Fattah El-Sisi signed an agreement with Russia’s president Vladimir Putin for the construction of a nuclear power plan.
According to Putin, “if final decisions are reached” regarding the power plant, construction would start straight away. The project would include capacity building and studies as part of the overall agreement.
Coal-fired power plant
While in March 2015, Egypt and Abu Dhabi-based Al-Nowais Investments Group signed a $4.5 billion (ZAR62 billion) agreement with the Egyptian Electricity Holding Company to construct Egypt’s first coal-fired power plant in the Suez region.
According to Electricity and Renewable Energy Minister Mohamed Shaker: “The environmentally friendly power plant, producing 2,460MW of energy, will not only sustain economic development but will also position Egypt as one of the global leading countries in the field of renewable energy,” Egyptian independent news agency Youm7 reported.
The deal was signed between Hussein a-l Nowais, chairman of the UAE Company, and Gabr el-Desouky, chairman of the Egyptian Electricity Holding Company.