World Bank approves US$500 mn loan to Egypt for natural gas project

The World Bank has approved a US$500 million loan to Egypt earmarked to fund natural gas supply to 1.5 million homes in 11 governorates across the country, including Aswan, Qena and Sohag.

In a statement issued on Thursday, the bank said that the project will help reduce the consumption of gas cylinders by connecting more houses to the main natural gas network. The loan should mainly target impoverished and underserved communities.

“We are delighted to be part of Egypt’s plans to develop service in the field of energy,” said Hartwig Schafer, the World Bank’s country directory for Egypt, Yemen and Djibouti, in statements published by the privately owned newspaper Al-Masry Al-Youm. “The new natural gas supply will guarantee safer and regular supplies of natural gas that are less costly than the gas cylinders."

Hossam Mohamed Baydas, head of the team supervising the project, added, "We are working closely with the European Union and the French Agency for Development to guarantee the success of the project."

The number of houses supplied with natural gas should increase by 40 percent thanks to the loan, according to the World Bank.

Earlier this month, Prime Minister Ibrahim Mehleb met with the CEO of British Petroleum, which also intends to pump US$10 billion into a natural gas project. In July 2010, the British oil company signed an agreement with Egypt to help develop the underwater gas reserves, which hold an estimated 5 trillion cubic feet of gas. However, work on the development project halted after the 2011 revolution.