Egypt's Nuclear Plan.

Of all the nuclear power projects in the MENA, with the exception of Iran's controversial programme, Egypt's the most advanced. Minister Younis says approval has been granted for a 1,000 MW station at el-Dab'a by 2015, which is open to foreign participation. The project's cost in early 2007 was put at $1,500m; this is way below most recent estimates made by international contractors. The first thing a foreign partner will consider is the price of the power to be sold in Egypt, the key for the return on investment (RoI). It this project succeeds, Egypt could become the biggest generator of atomic power in the Arab world.

Though overseen by the NREA, the NPPA will have a political umbrella. This was confirmed on Oct. 29, 2007, by President Mubarak. Addressing the inauguration of a northern Cairo power station, Mubarak then said a higher council for peaceful use of nuclear energy will be established according to a republican decree. Mubarak reasserted Egypt's resolve to go through with several atomic power plants, saying: "The peaceful use of nuclear energy has become part of Egypt's national security for energy and march towards the future".

Mubarak expressed confidence the people and government will live up to the responsibility of that decision. He said the sources of energy for development will be diversified and developed, underlining the importance of rationalising energy inside homes and factories and various production sites as lifestyle. At the closing session of the fourth annual conference of the ruling NDP in September 2006, Mubarak said Egypt will continue its scientific research to develop peaceful nuclear technology regardless of its high costs.

Egypt began very limited nuclear research in 1957. It set up an Atomic Energy Authority (AEA) but shelved its programmes after the Chernobyl disaster in 1986. It is the only Arab state to possess nuclear technology, but development of plants would take years. First mention of the programme's rejuvenation was made by the president's son, Gamal, at the 2006 NDP conference. Since the issue was raised in 2006, some Egyptians have seen the development of a nuclear programme as a question of national pride.

Abdul-Mon'em Sa'id, director of al-Ahram Centre for Political and Strategic Studies, on Oct. 29 said there was probably an element of prestige connected to Mubarak's statement, but that energy issues were the main focus, adding: "We are concerned about that [of Iran], but this is not the response, the response is global and not Egyptian. We want to have more energy in the country and the talk started last year".

The power sector in Egypt consists of several regional state-owned production and distribution firms, which in 2000 were held by the Egyptian Electricity Authority (EEA). In July 2000, the EEA was converted into a holding company, though still owned by the state. Reforms have since called for separation of generation, transmission, and distribution. Distribution is being privatised. The Egyptian Electric Holding Co. (EEHC) will keep having the transmission lines and power generation. New power generation will come mostly from privately funded projects, which will sell their output to EEHC under long-term contracts.

In a paper delivered on his behalf by Muhammad el-Gazar, head of the Water Stations Authority, at the 15th International Conference on Environment Protection in Alexandria on May 3, 2005, Younis said the power sector in Egypt had made use of the most of the River Nile in terms of generating electricity, noting that the stations at the Aswan High Dam, the Aswan Reservoir and the Esna Barrages generated 2,745 MW. He said wind farms produced 145 MW. Two new wind farms to be completed this year at Zaafarana, in the governorate of Suez, will produce 205 MW.

EEHC, under the Energy Ministry, is to add generating capacity by direct investment and through build, own, operate, and transfer (BOOT) projects. BOOT projects fund large-scale public infrastructure without affecting Egypt's debt profile. Independent power producers (IPPs) recover their costs through ownership and operation of the plant for a fixed period before handing it over to the state. The first BOOT project was a gas-fired steam plant with two 325-MW units at Sidi Kerir, 30 km west of Alexandria, completed in September 2000. The power by 2005 was sold at 2.54 cents per Kwh; but the competitive price stemmed largely from cheap gas supplied by Gasco. Now it is not clear whether this and other IPPs will be affected by government plans to raise gas prices as part of cuts in the state's energy subsidies (see the IPP background in down1EgyptEnrBaseJan3-06).

Younis in late November 2007 oversaw the signing in Cairo of an MoU between his ministry and Italcementi Group's Italgen for a major wind farm in the district of Gabal el-Zeit, on the Red Sea coast. The ceremony was also attended by Italcementi's visiting CEO Carlo Pesenti, Italian International Trade Minister Emma Bonino and Italian Ambassador Claudio Pacifico. This is part of NREA's plan for 20% of power to be generated from renewables by 2020. According to the MoU, Italgen is to complete feasibility studies for the farm by mid-2008. The farm will be built in stages for a capacity of 400 MW, making it one of the world's largest wind power systems.

There are several planned power plants to combine gas with solar energy or gas with wind in Egypt in co-operation with companies from Italy, other EU countries and the US. Under a contract worth over $111m signed in mid-2007, GE Energy and its Italian partner Techint Cimi Montubi (TCM) will supply two Frame 9FA+e gas turbine-generators, auxiliary equipment and training services to the EEHC-owned Upper Egypt Electricity Production Co. The machines will be used for an expansion of the Kureimat Power Plant about 90 km south of Cairo. In combined-cycle operation, Kureimat-III, will add 750 MW to Egypt's grid. The gas turbines will be site-rated at 256 MW each. Gas will be the primary fuel, with solar energy as a back up. Commercial operation expected by late 2008.

Egypt and Italy are in talks over a power linkage project Mediterranean countries and clean energy strategies. Minister Younis earlier in 2007 met with visiting Italian Deputy Minister of Economic Development Sergio D'Antoni. Talks touched on activating a co-operation agreement signed between the NREA and the Italian Environment Ministry on making use of renewables. Italy offered a grant of 0.65m to implement a project on electrification of several Matrouh villages by solar cells.

The private Orascom Construction Industries, Egypt's largest construction firm by market value, on Oct. 23 said it would build "the biggest solar power station" in the MENA. The 140 MW plant was to be built over 30 months in Kuraimat. The $111m deal, signed with Ministry of Electricity & Energy, is funded locally and internationally, including the National Bank of Egypt and the International Bank for Reconstruction and Development.

The electrical inter-link project of the Saudi and Egyptian grids, the region's largest in terms of capacity and expansion, in September 2007 took a step closer after Minister Younis reiterated the positive feasibility of its technical studies. Younis said a report then submitted by EEHC after its participation in a committee of electricity experts held in Saudi Arabia, stressed the importance of implementing the project. Younis said the project's importance came from the fact that power networks in Egypt and Saudi Arabia represented more than 85% of the Arab capacity and served all Arab grids.

Younis said this was the nucleus of a comprehensive Arab power linkage where the first phase was being implemented by linking the GCC states and neighbouring countries. According to the GCC Interconnection Authority (GCCIA), the first phase of the $7 bn GCC grid would be completed by end-2008 and is to go into operation in the first quarter of 2009. More than 30% of the construction in the $1.1 bn first phase, to link Saudi Arabia to Bahrain, Kuwait and Qatar through 800 km of transmission lines, was completed at end June-2007. In September 2006, Egypt and Saudi Arabia signed a contract to study the possibility of connecting their grids.

The Arab link would be part of a plan by the EU, Mediterranean and Middle Eastern states to allow power trading across the region, and would bring the GCC in line to join the world's largest electrical inter-connection - the Mediterranean Ring (MedRing) project. North African states are linked to Jordan, Syria, and Turkey through Egypt. Morocco has been connected to Europe through Spain since 1997. Plans are being discussed to link Egypt to sub-Saharan Africa through the Nile Basin Initiative.