Kuwait based Arab Fund to invest record $412 in Egypt
Egypt’s interim government signed two agreements with the Arab Fund for Economic and Social Development (AFESD) on Monday to finance projects in the electricity sector, a statement from the cabinet said.
A power station in Assiut, which is currently being upgraded to increase Egypt’s electric capacity by 650MW, will be funded by AFESD’s first $200m assistance package.
In December 2013, the Upper Egypt Electricity Production Company (UEEPC) and Banque Misr signed an EGP 285m loan agreement to fund renovations and replacements in Assiut’s power station.
The Islamic Development Bank (IDB) allocated $220m in February to finance the Assiut station. The allocation came as a part of a nearly $705m initiative to fund projects focusing on infrastructure, human development and education in “Muslim communities”, the bank said.
AFESD’s second agreement will contribute $162m to the Egyptian-Saudi electricity linkage project.
Egypt and Saudi Arabia have agreed to share power during peak consumption periods through establishing the Egyptian-Saudi linkage project, which would increase the combined capacity of the electrical grid to 3,000 MW.
Both countries signed the $1.6bn deal in June 2013 and agreed that the Saudi Electricity Company and the Egyptian Electricity Holding Company are responsible for financing, operating and repairing the connectivity equipment in their territories. However, the executive and consultative duties will be lead by a Canadian firm.
According to the cabinet’s Monday statement, the project is part of a larger electricity linkage system between Egypt and Gulf countries.
The Minister of Planning and International Cooperation Ashraf El-Araby and director general of AFESD Abdulatif Yousef Al-Hamad signed the agreement on Monday; Prime Minister Ibrahim Mehleb, Minister of Electricity Mohamed Shaker and Minister of Social Solidarity Ghada Waly were also present.
Meanwhile, AFESD also signed a $50m loan agreement with the acting head of the state-owned Social Development Fund (SFD) Hanaa Al-Helaly to finance small and micro enterprises.
The Kuwait-based AFESD is a financial institution that funds public and private investment projects with the aim of achieving economic and social development.
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