The $1.3bn power project is designed to ease energy shortages by increasing both efficiency and generating capacity in the country.

The project is also being co-financed by the European Investment Bank, the Arab Fund for Economic & Social Development and the African Development Bank.

Expected to be the most energy and water-efficient plant in Egypt upon completion, the new Damanhour plant will feature advanced modern technology and reduce the energy generation sector’s carbon footprint by 1.5 million TCO2e annually.

EBRD southern and eastern Mediterranean region managing director Hildegard Gacek said: "Investing in electric power is crucial when it comes to our work in Egypt.

"Overcoming the chronic supply shortages is also essential for sustainable economic growth and the living conditions of the population."

EBRD expects the funding to help diversify the sources of energy generation, energy efficiency and clean energy.

EBRD power and energy utilities director Nandita Parshad said: "Our partnership with the Egyptian Electricity Holding Company and the Ministry of Electricity and Renewable Energy is central to our work in the sector."

The project, which will also receive financing by EEHC’s and WDEPC’s own resources, is expected to achieve net electric efficiency of up to 58%.

Egypt Minister of International Sahar Nasr said: "The project will support Egypt to face the increasing power demand from the industrial, domestic and agriculture sectors. In addition it will reduce the burden on the main electricity grid."

Recently, EBRD and its partners embarked on a $250m funding package for private sector clean power generation in Morocco, Egypt, Tunisia and Jordan.

Image: EBRD’s new financing is expected to help diversify the sources of energy generation in Egypt. Photo: courtesy of European Bank for Reconstruction and Development (EBRD).