President Sisi, Chancellor Merkel witness Siemens Egypt megaproject inauguration
On March 2nd, 2017, Egyptian President Abdel Fattah El-Sisi, German Chancellor Angela Merkel, Siemens CEO Joe Kaeser and further high-ranking representatives witnessed the symbolic inauguration of the first phase of Siemens’ megaproject in Egypt.
The event marked an important milestone towards the completion of the project, which will boost the country’s power generation capacity by 45 percent when finished.
German Chancellor Angela Merkel arrived in Cairo Thursday on a two-day visit to meet with President Abdel-Fattah El-Sisi, and to inaugurate with her counterpart the first phase of a Siemens megaproject.
The Siemens megaproject will build three new power plants in Egypt at Beni Suef, Burullus, and the New Administrative Capital to add 4,800 MW. Siemens signed an 8 billion euro deal with Cairo two years ago that aims to boost Egypt’s power generation capacity by around 50 percent by May 2018.
The two leaders are scheduled to hold a press conference shortly after their meeting.
Sisi and Merkel witnessed the inauguration of the first phase of a project, run by the German company Siemens, to build three new power plants in Egypt.
El-Sisi and Merkel witness the inauguration via video conference from the presidential Ittihadiya Palace. The two leaders have also watched a documentary on the achievements of the German Siemens company in Egypt.
Egypt and Germany have strengthened economic and political ties over the past few years.
A high-level economic delegation accompanies Merkel in her visit. The delegation comprises of senior investment and economic companies including the Federation of Chambers of Commerce and the Federal Union to support investment and the economy in Egypt.
The chairperson of the Egyptian Electricity Holding Company (EEHC), Gaber Desouky, and the head of the Cairo Electricity Production Company, Mohamed Mokhtar, inspected the New Administrative Capital power plant on Wednesday before the official inauguration.
Project manager at Siemens, Sherif Kotb, said, “the commercial operation of 12 gas units will be kicked off within days from the inauguration ceremony, noting that all tests have been proven to work efficiently.” He added that “the entire project will be completed in May to put out a total of 14,400 MW.”
He told Daily News Egypt that Siemens overcame its financing problems by securing the cost of the projects in cooperation with Orascom Construction Industries and Elsewedy Electric, where Siemens received the guarantee of the Federal Office for Economic Affairs and Export Control, while the two Egyptian companies received the guarantee of the Authority of Defence Industry and Export Controls. Siemens has secured 60% of financing costs, while the two local companies secured the remainder financing required.
Kotb said that Siemens secured €4.1bn from different banks.
Meanwhile, project manager at Orascom, Mohamed Desouky, said that the company assisted the Ministry of Electricity in securing the required financing. The company agreed with 30 Italian banks to fund the project. He noted that Siemens plants will save $1.6bn worth of fuel per year.
Sources at the Ministry of Electricity told Daily News Egypt that the first phase of the three projects will add a total of 4,800MW to the national grid, including 2,400MW from six production units in Beni Suef, 1,600MW from four production units in Burullus, and 800MW from two production units at the New Administrative Capital.
EEHC signed contracts with Siemens last year to implement three combined-cycle power plants with a total capacity of 14,400MW. The three power plants are Burullus, Beni Suef, and the New Administrative Capital. Siemens is implementing the three projects on an EBC+Finance scheme, while EEHC will repay the loan over several years.
(Sources: Siemens AG, Daily News Egypt & Nile International)