Syria: EUR 200 million loan for Deir Azzour Power Plant
The Facility for Euro-Mediterranean Investment and Partnership (FEMIP) is granting a EUR 200 million loan for the construction of the Deir Azzour Power Plant in Syria.
The loan to the Syrian Arab Republic is for the construction of a 750 MWe natural gas-fired combined cycle power plant located near the town of Deir Azzour on the Euphrates river in eastern Syria. The project will be implemented and managed by the Electricity Generation and Transmission Company (PEEGT).
This is the second operation signed in Syria for electricity generation, after the EUR 200 million loan signed in November 2004 for the construction of the Deir Ali Power Plant located near Damascus, and the fourth overall in the Syrian electricity sector over the last six years.
The finance contract was signed on 25 November 2005 in Paris by Mr Philippe de Fontaine Vive, EIB Vice-President in charge of FEMIP, and Mr. Mounib Saem El-Dahr, Minister of Electricity.
Mr de Fontaine Vive commented: “In November 2004, I signed in Damascus the first FEMIP loan (EUR 200 million) for the construction of a major gas-fired power plant in Syria at Deir Ali. Today, one year later, the EIB commits another EUR 200 million for the construction of a similar plant at Deir Azzour. This marks the strong commitment of FEMIP and the EU to support Syria’s energy policy goal to shift from oil-based to gas-based electricity generation. Given Syria’s natural gas reserves, the development of a regional gas market offers tremendous opportunities for the economic growth of the country and the region. Syria, like all countries, also needs a reliable source of electricity generation to sustain its economic growth for the future, and serve the needs of its people – and gas-based electricity generation is the future for Syria, given the depleting domestic oil reserves. Reaching this objective of a radical shift from oil to gas constitutes a major challenge for Syria. Technically, it requires major investments, like the construction of the two power plants decided last year and this year. Economically, it also requires major investments – in the reforms of the energy policy system in Syria. I am confident that the Syrian Ministry of Electricity, together with the Government, will meet the challenges ahead. Major undertakings have already started, creating for examble the basis for an independent and cost covering gas sector, which are very promising and point in the right direction. I am proud that FEMIP is not only associated with the investments in the Syrian electricity sector, but that our cooperation and partnership in the Syrian energy sector will also help to foster economic reform and change, a process that is indispensable to secure the opportunity for economic growth and prosperity in Syria and for all its people. This is one of the components of EU economic cooperation with Syria supported today through the FEMIP loan for the Deir Azzour Project”.