Egypt: World Bank Supports Natural Gas Connections

Contact:
In Washington: Dina El Naggar (202) 473-3245
Delnaggar@worldbank.org

In Cairo: Eman Wahby (011) 202-574-1670

ewahby@worldbank.org

WASHINGTON, January 24, 2008 - The World Bank’s Board of Executive Directors today approved a loan in the amount of $ 75 million to support the Natural gas Connections Project.

The project will contribute to the national program of switching consumption of liquefied petroleum gas (LPG) to natural gas through investment in new connections.  In addition the project will support expansion of natural gas provision in densely populated low income areas, thereby enhancing its affordability to a wider group of consumers.

“This project serves as a good example of the strong partnership between the Government of Egypt and the World Bank and builds on the reforms that the government is currently implementing across the energy sector. “ said Emmanuel Mbi, Country Director for Egypt, Yemen and Djibouti. “We are particularly pleased to be able to contribute to Egypt’s growth and development agenda through a portfolio of projects that balance economic, social and environmental objectives,” he added.

The Government of Egypt’s program aims to connect approximately 2 million households to the natural gas network over the next 6 years. The World Bank support will focus on contributing an investment targeting 300,000 households within Greater Cairo. The project will include two components: (a) adding 37 km of pipelines and 4 pressure reduction stations (PRSs) to the existing gas transmission system in the Cairo area to improve reliability of supply for the expansion of the distribution network, (b) gas distribution and connection of about 300,000 new customers, including the conversion of the customers’ appliances to natural gas.

“Conversion to piped natural gas will contribute to higher welfare among consumers in Egypt by reducing the cost and increasing the convenience and reliability of energy supply, as well as enhancing safety,” said Anna Bjerde, World Bank Task Team Leader. ”The proposed financial assistance to expand the existing network and increase the number of households connected to the natural gas distribution network will support the Government’s strategy to utilize its natural gas resources, “she further added.