July 2, 2014 / 2:23 PM / 6 years ago

Egypt's Elsewedy wins state tender for wind farms

CAIRO, July 2 (Reuters) - Egypt has named Elsewedy Electric , the Arab world’s biggest listed cable maker, as winner of a tender to build six wind power stations, the company said, as the country battles a severe energy shortage.

The issue of power supply is important in Egypt and a potential test of the government’s competence as it attempts to recover from years of political upheaval.

Egypt relies heavily on gas to generate power for households and industry and near-daily power cuts this year emphasised the extent of an energy crunch, which is unlikely to be alleviated soon by the project which as yet has no expected finish date.

The government has said it would cut its huge energy subsidies programme and support renewables in the fiscal year that started this week, but has given no details.

Elsewedy said the tender for the wind power stations on the Red Sea coast with a capacity of around 100 megawatts (MW) each would involve it building, owning and operating them, as well as selling the power they produce for 25 years.

A final contract had yet to be agreed on, the company said. It gave no details on how much the project would cost and could not immediately be reached for comment.

Egypt’s new President Abdel Fattah al-Sisi said in the run-up to his election in May that Egypt can currently produce around 30,000 MW and the electricity ministry has said peak consumption stands at 28,000 MW, but some experts have disputed these figures, saying the grid is weaker.

One expert, Justin Dargin at the University of Oxford, has said he expects the shortfall to reach 4,000 to 5,000 MW in July and August, when Egyptians have air conditioners running day and night, leaving a huge gap in the grid to cover even with an additional 600 MW.

Elsewedy says on its website it has a wind turbines assembly factory with 240 megwatts production capacity, which it expects to double within five years.

Elsewedy shares closed at 33.00 Egyptian pounds, up around 1.7 percent. The bourse had stopped trading the company’s shares earlier in the day pending publication of the statement. ($1 = 7.1501 Egyptian Pounds) (Reporting by Shadia Nasralla; Editing by David Holmes)

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