Egypt, Saudi Arabia sign contracts for $1.8B electrical interconnection project

CAIRO – 5 October 2021: The Saudi Electricity Company and the Egyptian Electricity Transmission Company signed Tuesday the awarding contracts of the electrical interconnection project between the Kingdom and Egypt.

The contracts, which were signed simultaneously between Riyadh and Cairo, included contracts with three consortiums of international and local companies to implement the connection project, which has a capacity of 3,000 megawatts, with a 500 kV HVDC technology.

They consist of the construction of three high-voltage substations, the East Madinah Station, the Tabuk Station in the Kingdom, and the Badr Station in East Cairo, linked by overhead transmission lines with a length of about 1,350 meters and marine cables in the Gulf of Aqaba with a length of 22 km, at a total cost of the project amounted to $1.8 billion.

The awarding contracts were signed by Khaled bin Hamad Al-Qunun, CEO of the Saudi Electricity Company, from the Saudi side, and from the Egyptian side, Sabah Mohamed Mashali, chairperson and managing director of the Egyptian Electricity Transmission Company.

Prince Abdul-Aziz bin Salman, Minister of Energy, said, in a statement issued by the Egyptian Ministry of Electricity, that reaching this important stage of this project is the culmination of the directives of the leaderships of the two brotherly countries represented by King Salman bin Abdulaziz Al Saud and President Abdel Fattah Al-Sisi.

He stated that the directives stipulate strengthening the strong brotherly ties that unite both countries, consolidating the ancient and distinguished relations between them, achieving the aspirations of the two brotherly peoples, and implementing the memorandum of understanding (MoU) in the field of electrical interconnection between the two countries.

Bin Salman stressed that the electrical connection in the Kingdom in general is consistent with its executive programs emanating from the Kingdom's Vision 2030, which enjoys the patronage and interest of Prince Mohammed bin Salman, Crown Prince, Deputy Prime Minister and Minister of Defense, which aims to invest the strategic location of the Kingdom and its possessions of the largest electrical network in the Arab region and the Middle East to become a regional center for the exchange of electrical energy through electrical interconnection projects with countries, which contributes to strengthening the regional market for electricity trade and supports the participation of the two countries in it.

For his part, Mohamed Shaker, Egyptian Minister of Electricity and Renewable Energy, stressed that the project comes as a culmination of the depth of Egyptian-Saudi relations throughout history and confirms the directives of the leaderships of the two countries.

He stated that it confirms the leadership of the two countries in achieving the economic and social goals of the countries of the Arab world as a whole, considering that linking them will be the nucleus of a common Arab linkage; in addition to that it complements and supports the visions of both countries (2030).

Shaker added that this project represents a strong connection between the two largest electric networks in the region, and will reflect on the stability and increase the reliability of the electricity supply between the two countries, in addition to the economic and developmental returns of exchanging an amount of up to 3,000 megawatts of electricity.

The Egyptian Minister explained that in light of the two countries' ambitious plans to expand their reliance on renewable energy sources, this connection represents a safety valve for the two electrical networks to confront the nature of the instability of renewable energies in general, and provides huge investments to address any effects resulting from that.

The project will achieve a number of common benefits for the two countries, including enhancing the reliability of the national electrical networks, supporting their stability, and making optimal use of the generation capacities available in them and the timing differences in their peak electrical loads, and enabling the two countries to achieve the ambitious goals of entering renewable energy sources within the optimal mix of electricity production.