Saudi utilities developer Acwa Power signed a $2.3 billion power purchase agreement with the Egyptian Electricity Transmission Company (EETC), for a gas-fired combined cycle power project.
The 2,300MW project will be based in Luxor, in southern Egypt. According to a statement from Acwa Power, the first phase of the project is expected to start operations in Q3 2022, with full commercial operations to begin in 2023. The power purchase agreement (PPA) is for a build-own-operate framework, for a period of 25 years and will be vital in meeting Egypt’s increasing demand for electricity over the next few years.
Commenting on the signing, Paddy Padmanathan, president and CEO of Acwa Power, said: “Signing the PPA today represents a significant step in the development of the project, more importantly it demonstrates the commitment of the Egyptian government to encourage the participation of the private investors in infrastructure projects.”
He continued: “We look forward to completing the financing arrangements and commence construction of the power plant to enable us to contribute to the development of the Egyptian power sector by delivering reliable, safe and cost-effective electricity.”
The signing ceremony took place in the presence of Egypt’s Prime Minister Eng Mustafa Madbuoly; electricity and renewable energy minister Dr Mohamed Shaker; Osama Nugali, Ambassador of Saudi Arabia to Egypt; Acwa Power chairman Mohammed Abunayyan, and senior officials of the ministry.
Rajit Nanda, chief investment officer of Acwa Power, added: “Egypt has always been a strategic interest country for Acwa Power. Ceremonies like this one taking place today reaffirm Acwa Power’s commitment to the Egyptian power sector. The project is very significant as it represents one of the highest foreign direct investment infrastructure project in Egypt. I am looking forward to working with the international finance institutions such as DFIs, ECAs, and commercial banks to raise the required fund for the project.”
Acwa Power has partnered with Egyptian group, Hassan Allam for the project.