Egypt may get a $2 billion boost in the asset sale plan

Actis and Edra Power Holdings have revived their interest in purchasing one of the major Egyptian power stations, in a deal that could be worth about $2 billion and will enhance the government’s efforts to accelerate asset sales to revive the economy.

The two companies intend to enter into bids to buy the largest possible share of the station and the operations of the facility located in Beni Suef, according to what Bloomberg quoted from sources, which Al viewed.

This comes after the companies expressed interest in 2019 in a sale that was discussed but did not materialize.

The plant is one of 3 plants built by Siemens with a total capacity of 14.4 GW that President Abdel Fattah El-Sisi inaugurated in mid-2018 as the latest in a series of ambitious megaprojects. Now it is on the auction floor, as the most populous country in the Middle East races to reduce the country’s economic footprint and secure much-needed foreign currency.

Egypt is seeking to sell stakes in more than 20 state-owned companies and assets, amid Gulf interest in buying them. But a deal with London-based Actis or Malaysia’s Edra would be a welcome infusion of capital from outside the region and possibly the most valuable single deal ever.

Lom, Actis and Edra respond to requests for comment. ADRA is a subsidiary of China General Nuclear Power Corp.

The cost of building the three plants is 6 billion euros ($6.4 billion), with funding coming mainly from a consortium led by Deutsche Bank AG, HSBC Holdings and KFW-Ibex Bank.

The state-owned Egyptian Electricity Holding Company paid about 85% of the costs of the three power stations with a loan from the banking alliance backed by a sovereign guarantee.

The new buyer will take responsibility for the plant’s financial obligations, according to people familiar with the plans, helping Egypt ease one of the largest debt burdens in the Middle East. The $2 billion valuation includes debt on the facility, which means the government is likely to receive less than this amount for the sale.

The sources said that the authorities have notified the lenders of the potential deal and are awaiting their approval before sending the so-called request for proposals to Actis and Edra.

A power purchase agreement will also be signed with the company, which will sell the electricity produced to the government.

The Egyptian sovereign wealth fund said in 2019 that it may acquire a stake of about 30% in the three terminals, while international investors will take the rest.

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