20% Milestone Reached in Egypt-Saudi Electrical Link Project

Technicians lay a submarine cable. (Reuters)
Technicians lay a submarine cable. (Reuters)
TT
20

20% Milestone Reached in Egypt-Saudi Electrical Link Project

Technicians lay a submarine cable. (Reuters)
Technicians lay a submarine cable. (Reuters)

Dr. Ahmed Mohina, the First Undersecretary at Egypt’s Ministry of Electricity, revealed that the progress on the Egypt-Saudi Arabia electrical connection project has crossed the 20% mark.

The project aims to kick off operations by the second half of 2026 and is poised to lay the groundwork for a shared electricity market among Arab nations.

The collaboration between Egypt and Saudi Arabia on this project, initiated in 2012 is worth $1.8 billion, with Egypt contributing $600 million.

Funding comes from sources like the Kuwaiti Fund for Arab Economic Development, the Arab Fund for Economic and Social Development, the Islamic Development Bank, and Egypt's own resources.

Mohina assured that there are no financial obstacles, with each party funding its share. He highlighted ongoing work, including specialized studies for the submarine cable route.

This initiative represents a milestone for high-voltage power exchange in the Middle East and North Africa, linking Badr City in Egypt to Madinah via Tabuk in Saudi Arabia.

Mohina explained that Egypt’s peak power demand occurs at night, while Saudi Arabia’s peaks during the day. By connecting the two, they can exchange up to 3,000 megawatts, potentially extending the linkage to other Gulf countries.

The project involves building three high-voltage conversion stations and connecting them with overhead transmission lines and submarine cables in the Gulf of Aqaba.

According to the Egyptian government, the project promises a return on investment of over 13%, with an 8-year cost recovery period for participating in electricity generation reserves.

However, using the connection for energy exchange during peak periods could yield a return of around 20%, with additional benefits like facilitating electricity trade, especially during winter, enabling surplus electricity export from Saudi Arabia to Egypt.



Egypt's Net Foreign Assets Retreat in April after March Jump

A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo
A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo
TT
20

Egypt's Net Foreign Assets Retreat in April after March Jump

A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo
A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo

Egypt's net foreign assets (NFAs) fell by $1.5 billion in April, central bank data showed on Wednesday, retreating from March, when the approval of the fourth review of the country's IMF program sparked a jump.

NFAs slid to the equivalent of $13.54 billion, from $15.08 billion at the end of March, according to Reuters calculations based on official central bank currency exchange rates.

In March, NFAs jumped by $4.9 billion after the International Monetary Fund approved the disbursement to Egypt of $1.2 billion after completing its review of the country's $8 billion economic reform program, Reuters reported.

The IMF also approved a request for a $1.3 billion arrangement under the IMF's resilience and sustainability facility.

The approvals led to an inflow of foreign investment in Egyptian pound treasury bills, bankers said.

Egypt had been using foreign assets, which include assets held by both the central bank and commercial banks, to help prop up its currency since as long ago as September 2021. Net foreign assets turned negative in February 2022 and only returned to positive territory in May last year.

Foreign assets increased in April at both the central bank and commercial banks, while foreign liabilities fell at both as well.