Officials in the government said the Kuwait Fund for Arab Economic Development (KFAED) agreed to loan Egypt approximately KWD 30m ($98.7m) to fund the electricity linkage project between Egypt and Saudi Arabia.
KFAED will transfer the loan in the next few days and all the arrangements between the Egyptian and Kuwaiti parties have been finalised, according to sources.
The cabinet approved the presidential decree regarding the loan agreement between Egypt and KFAED, according to a cabinet statement released Friday. The agreement was signed in Cairo in November 2015 aiming to fund electricity linkage between.
The electricity linkage project targets to exchange around 3,000 MW of electricity during peak hours to meet the demand on electricity.
Peak hours in Saudi Arabia fall during the afternoon and after sunset in Egypt with an interval of at least three hours between the respective hours.
The project is based on linking the two grids from Badr substation in Egypt to East Medina substation in Saudi Arabia, passing through the Tabuk substation in Saudi Arabia. The project covers 1,300 km with a capacity of 3,000 MW to link the two largest electricity systems in the Arab world, which have a total capacity of 90,000 MW.
Egypt and Saudi Arabia signed an agreement for electricity linkage in June, amounting to $1.6bn. The Egyptian share in the agreement amounts to approximately $610m, according to the Egyptian Ministry of Electricity.
Over the past few years, Egypt suffered long power cuts due to the shortage in natural gas production against the continued increase in consumption. Egypt is largely dependent on natural gas in generating electricity.
Over the next few days, Egypt will receive a grant from China, amounting to approximately CNY 200m ($31.5m). The grant will be used to establish a centre to assemble and examine satellites, study, and implement a project to combat desertification. Other projects are also being studied to be included in the grant.
