China Exim Bank pledges a USD 2.6 billion export buyer's credit loan to the Egyptian Electricity Holding Company for the Ataqah Hydroelectric Plant

Project narrative

On February 10, 2019, The Export Import Bank of China came to an agreement with the Egyptian Electricity Holding Co to provide a USD $2,600,000,000 export buyer's credit loan to fund the construction of the Ataqah (عتاقة) hydro power station. According to Daily News Egypt, an Egyptian newspaper, the terms of the loan including interest rate, maturity, and grace period were still under negotiation. The loan’s terms were expected to be finalized by June 2019. As of June 22, 2022, there is yet to be any available information regarding the terms of the loan agreement. Previously in March 2015, the China Water Resources and Hydropower Construction Corporation (Sinohydro) signed a conditional agreement with the Egyptian Ministry of Electricity and Renewable Energy (MERE) to build a 600m high, 2,400MW, pumped storage power station on Ataqah Mountain in Suez Governorate, Egypt. As part of the contract Sinohydro will engineer, procure, and construct the hydroelectric plant as the sole EPC contractor. On June 15, 2017, the Egyptian government contracted with Artelia, a French consulting firm, to assess Sinohydro's technical and financial proposal for the project. On September 3, 2018, during an economic forum between Egypt and China, a conditional agreement for the project was signed, pending financing and a formal contract to be signed later. The Egyptian Hydro Power Projects Executive Authority (HPPEA), The Egyptian Ministry implementing the project, received environmental and safety approvals as of September 19th 2019. However, in January 2020 the HPPEA was abolished by the Egyptian government and its mission and assets were transferred to the Renewable Energy Development Agency under MERE. On September 12, 2021, Youm7 stated that the final contracts needed to begin preparing the site for construction should be signed during the 2021-22 fiscal year. According to Akhbar el-Yom, the project's planning was still progressing as of December 24, 2021, yet an implementation timeline remains unclear. The project involves constructing a reversible hydroelectric power plant. This involves pumping water through turbines in order to store electricity. Reservoirs holding 8 million cubic meters of water at the top and bottom of the mountain will provide the water source by which the plant will operate. According to some sources the plant will use wastewater. The total surface area demarcated for the hydroelectric plant is 168,000 m^2. However, In June of 2019, MERE entered negotiations with Egypt’s National Centre for Planning State Land Usage to expand the land allocated to the project. The total cost of the hydroelectric dam complex is estimated at USD $2,600,000,000. Construction time is projected to take 6 years and the project is projected to reach completion in 2024, according to media sources. Upon completion of the project, the hydroelectric power plant at Ataqah will be the fourth highest pumped storage power station in the world. According to multiple sources, the project is part of MERE’s effort to diversify Egyptian electrical generation and move to more sustainable energy sources. MERE’s plan includes producing 20% of all Egyptian electricity through renewable means by 2022.