Minister of Electricity Ahmed Imam said the Arab Fund for Economic and Social Development has offered to finance Egypt’s share in an electricity linkage project with Saudi Arabia.
Imam told Turkish news agency Anadolu that the fund has offered Egypt a soft loan of US$100 million, the details of which should be discussed over the coming days.
In June, Egypt and Saudi Arabia signed an agreement to link their power grids. The cost of the project is $1.6 billion, of which Egypt’s share is $610 million, according to the Egyptian Electricity Ministry.
The minister said that the World Bank has expressed a desire to contribute a loan of around $150 million but he added that priority will be given to Arab funds, which do not require as many procedures as international funding institutions.
The electricity linkage project will lead to the exchange of 3,000 megawatts of electricity at peak hours of consumption. Technical and economic feasibility studies have shown the project would be successful, Imam added.
In Saudi Arabia, peak hours of consumption are during the day while in Egypt electricity consumption is at its highest around sunset.
The project is scheduled to be completed in 2016.
Pilot operation of the project should begin in early 2015, according to the agreement signed between the two countries.