EBRD to help finance transition from gas to wind in Egypt

The head office of the European Bank for Reconstruction and Development (EBRD) is seen in London, Britain November 22, 2016. REUTERS/Stefan Wermuth

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CAIRO, Sept 11 (Reuters) – The European Bank for Reconstruction and Development (EBRD) will help finance the dismantling of 5 GW of inefficient gas-fired power plants in Egypt from 2023 while pledging up to 1 billion dollars for renewable energy, said its regional director on Sunday.

EBRD would raise up to $300 million in sovereign financing for projects including Egyptian grid stabilization works, addition of storage batteries, local renewable energy supply chain development and conversion workers,” said Heike Harmgart, EBRD Managing Director for the Southern and Eastern Mediterranean.

A separate $1 billion pledged for renewables would be about a tenth of the private financing needed for 10 GW of mainly wind-powered projects planned by the government by 2028, she added.

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Egypt is a natural gas producer trying to reduce domestic consumption so it can export more to Europe at a time of high prices and demand resulting from Russia’s invasion of Ukraine.

It has a surplus of energy after the installation of three huge gas-fired power plants built by Siemens from 2015.

The government hopes gas exports can help contain pressure on the Egyptian currency after the war in Ukraine triggered the latest drop in dollar inflows from portfolio investment and tourism.

The role of gas is expected to be a point of contention at the COP27 climate summit in Egypt in November.

Climate activists say there should be a rapid transition away from gas. As host of COP27, Egypt gives voice to some African states that wish to continue using gas as a transition fuel to develop their economies. Read more

About 3 GW of the planned 10 GW of new renewable energy would be made available for a pilot phase of green hydrogen production in Egypt’s Ain Sokhna port on the Red Sea, Harmgart said.

Some would go to replacing the capacity lost by dismantling thermal power plants.

Egypt has announced a series of MoUs for green hydrogen and ammonia projects in Ain Sokhna.

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Editing by Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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