The European Bank for Reconstruction and Development (EBRD) is to grant a €165 million loan to Egypt to finance the upgrade of the electricity transmission grid, a venture that is also aimed at reducing pollutant emissions.

EBRD will start the disbursement of the loan from 13 December, the bank stated.

The loan will also cover the expansion of several stations nationwide, including a 500 kilovolts substation in Cairo, replacing an old gas-powered station located in Qalyubia’s Shubra El-Kheima. 

The loan will also cover the construction of a 200 km high-voltage overhead transmission line. The line will transfer 2.1 GW of renewable energy produced from the Gulf of Suez region.

The projects are estimated to cost around €200 million -- of which €165 million is to be provided through the EBRD’s loan and €35 million to be granted by the EU.

EBRD said these projects are “crucial” to allow Egypt to achieve its long-term strategy of having 42 percent of the electricity generated from renewables by 2030.

The projects are part of a broader investment scheme worth $2 billion under the Egyptian Energy Pillar of Egypt’s Nexus Water, Food, and Energy (NWFE) initiative.

Launched in July 2022, the NWFE initiative aims to mobilize climate finance and private investments from multiple international financing institutions to accelerate the national climate agenda and support the country's green transition.

The EBRD has financed 163 projects since it began operations in Egypt. Of these projects, 57 percent were directed to the private sector.

In March, the EBRD announced its plan to invest over $1.4 billion in Egypt, the highest investment the bank has ever made in the country, to seize the available investment opportunities.