Egypt and Saudi Arabia postpone interconnection agreements indefinitely

Egypt and Saudi Arabia have again postponed awarding the tender for the electricity grid between the two countries, despite assurances from the joint committee of its willingness to sign the final contracts for the project at the end of this month.

Government sources told Daily News Egypt that the companies competing for the tender of the electric connection project with Saudi Arabia did not give a specific date for discussions or price negotiations after submission of financial proposals for the project, and the result has been postponed for an indefinite period.

Four international companies offered their technical and financial offers to implement the lines and transformers of the electricity interconnection project with Saudi Arabia, including Siemens, ABB, State Grid, and Alstom. Companies have long been waiting for the tender to start implementation.

The sources pointed out that the negotiations on the implementation of the project of electricity linkage need a longer period, and there is a delay in the review of contracts and studies, and Egypt is seeking to complete contracts, as soon as part of its plan to connect with Arab and African countries and be a regional centre for energy.

The project connects the two power networks in Egypt and Saudi Arabia to a DC 500 kV from Egypt’s Badr transformer substation to East Medina station, through Tabuk station in Saudi Arabia with a length of 1,300 km, including 820 km in Saudi Arabia, 480 km in Egyptian lands, with a capacity of 3,000 MW.

The project costs about $1.6bn, with the Egyptian side amounting to $600m. The Arab Fund for Economic and Social Development, Islamic Development Bank, and the resources of EETC, will contribute to the project’s funding along with the Kuwait Fund for Arab Economic Development.

Nagy Gargiry, ABB regional director in Egypt, North, and Central Africa said that the company has made a financial bid in the tender for the electricity link project with Saudi Arabia and is waiting for price discussions or the finalization of the tender by the officials.

Minister of Electricity Mohamed Shaker said in previous statements that the trial operation of the electric connection with Saudi Arabia was supposed to start in 2012 to exchange 3,000 MW at peak times.

Egypt started negotiations with Saudi Arabia in 2010 to establish an energy exchange project between the two countries, but due to political events the project was postponed more than once.

In 2014, Egypt completed negotiations with Saudi Arabia for the implementation of the project, and offered tenders for cables, lines, and transformers, with the support of the political leadership of the two countries.

The post Egypt and Saudi Arabia postpone interconnection agreements indefinitely appeared first on Daily News Egypt.

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