• 18:39
  • Friday ,08 August 2014

World Bank agrees to $500m Egypt loan for home gas delivery: Mehleb


Home News


Friday ,08 August 2014

World Bank agrees to $500m Egypt loan for home gas delivery: Mehleb

The World Bank has agreed to grant Egypt a $500m loan to finance a mega-project delivering natural gas to homes across the country, Prime Minister Ibrahim Mehleb announced Tuesday.

Egypt will have a grace period of up to 8 years on the loans, while payments on the loan will be made over a 28-year period.
The announcement came during Mehleb’s meeting with World Bank Group President Jim Yong Kim in Washington DC addressing continuous cooperation between Egypt and the World Bank. The meeting was also to find ways to support the efforts of the World Bank, particularly in the context of economic and social development.
Access to natural gas will be given to 1.5m Egyptian homes in 11 governorates, including Sohag, Qena and Aswan in Upper Egypt. The aim of the programme is to deliver natural gas as a substitute for butane, which is imported.
According to a statement it issued at the end of July, the World Bank intends to finance the supply of natural gas to homes in Egypt. This is a form of supporting the Egyptian government’s programme to shift consumption from mostly imported liquefied petroleum gas, distributed in cylinders, to natural gas. The programme also aims to link homes to a unified power grid.
This project comes within the framework of continued cooperation between the World Bank and the Egyptian government to achieve social justice, and to provide necessary support for low-income citizens.
Over 75% of homes in Egypt currently depend on gas cylinder distribution for their energy needs. This system of distribution is problematic, however, due to the frequent unavailability of cylinders which are also difficult to carry due to their heavy weight. They are also sometimes distributed through informal markets.
By the end of the project, the number of homes in Egypt connected to the natural gas grid will be approximately 8.2m, a 40% increase from the current amount of 5.8m.
Mehleb and Kim will sign off on the agreement in a ceremony in Cairo, to take place in the coming weeks.