Saudi Arabia's cabinet will likely review next month a $1.5 billion project linking the power grids of the kingdom with Egypt, a person familiar with the matter said Monday.
Saudi Arabia
's
cabinet will likely review next month a $1.5 billion project linking the power
grids of the kingdom with
Egypt
, a
person familiar with the matter said Monday.
"The feasibility study and the designs for the project are complete...and
should be reviewed by the Saudi cabinet in December," the person told Dow
Jones Newswires. "Both countries are keen to implement the project,"
the person added.
Last month,
Saudi Arabia
's
water and electricity minister Abdullah Al-Hussayen said the cabinet was
expected to review the project's plan soon and "if it passes that stage
then it will set the stage for starting to agree on the commercial agreement
and starting the bidding process for the construction."
The project, which aims to exchange 3,000 megawatts of electricity between the
two power-hungry countries through direct-current electrical lines, was
initially expected to start trial operations in 2015.
It has been severely delayed due to the political upheaval in
Egypt
,
despite the North African country's desire to push the project forward,
according to people aware of the situation.
A spokesperson for
Egypt
's
electricity ministry told Zawya Dow Jones in a recent interview that the
project was expected to move faster after the new cabinet in
Egypt
was
appointed.
Saudi Electricity Co. (5110.SA), the largest listed utility among the Gulf Arab
states, and Egyptian Electricity Holding Co. will each finance, own and operate
parts of the grid in their respective countries.
Both
Saudi Arabia
and
Egypt
had
expected the construction of the mega project to start in 2012.
Egypt
plans
to send
Saudi Arabia
electricity through the connection in the afternoons and the kingdom will send
electricity to
Egypt
in
the evenings, taking advantage of the difference in the countries' peak usage
hours.
Saudi Arabia, the Middle East's biggest economy, has seen its power
requirements rise rapidly in recent years as its population grew and the
government spent oil revenues on new industries and infrastructure to diversify
the local economy away from hydrocarbons.
The kingdom needs to invest 500 billion Saudi riyals ($133.3 billion) in
electricity generation and distribution over the next 10 years to meet the
growing demand. It is also studying a plan to export electricity to European
markets during the winter when the kingdom's power demands are low, and import
it during the summers when the country has peak load.
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