China Development Bank pledges USD $3.7 billion loan to the Egyptian Electric Holding Company for construction of the Hamrawein coal-powered power plant

China Development Bank pledges USD $3.7 billion loan to the Egyptian Electric Holding Company for construction of the Hamrawein coal-powered power plant The financing of the 6000MW clean coal fired plant at Hamrawein, Red Sea Governorate, Egypt (600km southeast of Cairo) was first planned on March 15th, 2015 and suspended on February 24th, 2020.

Before the suspension, a consortium comprised of Dongfang Electric Corporation Ltd., and Shanghai Electric Power Company Ltd., and Hassan Allam Construction were awarded a USD $4,400,000,000 EPC+F contract to construct the power plant in a period of six to seven years.

Financing was initially expected to come from The China Export Import Bank (China Exim Bank) and the Industrial and Commercial Bank of China (ICBC). However, no financing agreement was negotiated between China Exim Bank and ICBC with Egyptian authorities. At a later date, a China Development Bank Loan of USD $3,700,000,000 was offered but not agreed to.

Multiple Egyptian sources cite the indefinite suspension of the project due to Egypt’s energy surplus and newly achieved energy self sufficiency.

This project captures the 3.7 million USD loan proposal from CDB, and if this project progresses further it will need additional updates.

Hamrawein Project Timeline: On January 21st, 2016, the Egyptian Government, Dongfang Electric Corporation Ltd., and Shanghai Electric Power Company Ltd., signed an agreement for the construction of two coal fired power plants in Hamrawein, Red Sea Governorate, Egypt. The agreement was conditioned on the completion of technical studies.

At the time, the project was expected to be financed by loans with 15-year maturities from China Exim Bank and ICBC.

Previously, on March 15, 2015, during the Egyptian Economic Development Conference at Sharm El Sheikh, the Egyptian Ministry of Electricity and Renewable Energy (MERE), Dongfang Electric Corporation, and Shanghai Electric Power Company signed memorandums of understanding (MoUs), for the construction of two coal power plants at Hamrawein.

Dongfang submitted an initial study for a proposed coal plant in late March, 2015, while Shanghai Electric submitted a study in early April, 2015.

On March 2nd, 2017, Daily News Egypt, an Egyptian newspaper reports that the Egyptian Electricity Holding Company (EECH) hired Tractebel Engineering Consultancy Company to review seven offers made to establish a 6,000MW coal plant at Hamrawein.

Among the offers were Shanghai Electric’s proposal to construct a 4,640MW capacity coal plant and Donfang’s offer to build a 6000MW coal plant.

On June 26th, 2018, Energy Egypt, an Egyptian energy news source, reported that EECH announced that a consortium between Dongfang Electric Corporation Ltd., and Shanghai Electric Power Company Ltd., had been awarded the contract to build the Hamrawein coal fired power plant for a total cost of USD $4,400,000,000.

The construction period was expected to last six to seven years from the start of construction.

On September 2nd, 2018 during the China Africa Cooperation Forum Beijing Summit, Dongfang Electric Corporation Ltd., Shanghai Electric Power Company Ltd., and MERE signed a general contract for the construction of six 1000MW clean coal power stations at Hamrawein, Egypt. Dongfang Electric Corporation and Shanghai Electric Power Company formed a consortium to implement the construction.

The contract is an engineering, procurement, and construction contract plus finance (EPC + F). Participating in the consortium is also Egypt’s Hassan Allam Construction. On February 6th, 2019, China Development Bank offered to finance the project with USD $3,700,000,000. The Egyptian government considered guaranteeing the loan but did not.

Ultimately, the loan was negotiated but not agreed to.

On February 13th, 2019, Daily News Egypt, reported that there was still no financing agreement for the Hamrawein project, but that the Economic Counselor at the Chinese Embassy in Egypt announced China Exim Bank would likely provide USD $3,000,000,000 in the next few years. On February 24th, 2020, MERE announced that it would postpone construction of the Hamrawein coal fired plant.

MERE has postponed an assigned counselling session on environmental and social impacts of the Hamrawein plant more than four times.

MERE indicated that it would prefer to launch a renewable energy project, instead, and had not yet informed the consortium constructing the plant of the Ministry's decision.