EBRD approves loan for Egypt’s NWFE grid reinforcement project

European Bank for Reconstruction and Development (EBRD) has approved a provision of a sovereign loan of up to EUR165 million to the Arab Republic of Egypt, to the state-owned Egyptian Electricity Transmission Company, to finance the upgrade and reinforcement of the electricity transmission grid under Egypt’s Nexus Water, Food & Energy (NWFE) Grid Reinforcement project.

NWFE is a policy dialogue initiative developed by the EBRD and announced at COP27 in Sharm El Sheikh, with an aim to reduce greenhouse gas emissions. The proceeds of the loan will be used to finance the upgrade of a 500 kV substation in the Cairo governorate in Egypt that is crucial for the stability of the network and is directly linked to the closing of a gas-powered power plant (Shoubra El Kheima) under the NWFE initiative, and the construction of a 200 km high-voltage overhead transmission line (OHL) that will evacuate 2.1 GW of renewable energy from the Gulf of Suez region, where several wind projects are currently under development or construction. The project will require total financing of EUR200 million split between an EBRD loan of EUR165 million and European Union (EU) grants (subject to EU approvals) of EUR35 million. Up to EUR120 million of the blended facilities (60 per cent of total financing) will be used to finance the 200 km OHL, and the remaining EUR80 million (40 per cent of total financing) will finance the upgrade of the high-voltage substation.