Japan Bank for International Cooperation (JBIC) has signed a US$207 million loan agreement with Saudi Electricity Company (SEC) for a power interconnection project that will link the electricity grids of Saudi Arabia and Egypt.

The loan is co-financed with MUFG Bank, Bank of Yokohama, and Nishi-Nippon City Bank. JBIC will contribute US$103 million, and will also provide a guarantee for part of the loan provided by the private financial institutions.

The project involves the construction of a 3,000 megawatt high-voltage direct current (HVDC) system with 1,350 kilometres of overhead power lines and 22 km of submarine cables, connecting northwestern Saudi Arabia and Egypt.

The electricity interconnection project is the first large-scale HVDC interconnection in the Middle East and North Africa to link electricity grids. It will feature HVDC conversion stations, located in Medina and Tabuk in Saudi Arabia, and Badr city near Cairo.

The loan is provided as part of JBIC’s GREEN (Green action for reconciling economic growth and environmental preservation) initiatives, and will provide SEC with part of the funds necessary for construction activity in Saudi Arabia.

Saudi Arabia views the growth of renewable energy, and the enhancement of transmission infrastructure for the purpose of growing renewable energy, as an important policy issue under its national development strategy, Saudi Vision 2030.

Trial operations on the US$1.8 billion connector are scheduled to begin in May 2025. It will then go live with a first 1.5-gigawatt phase in June, followed by the second 1.5GW phase in November.

Last year the Egyptian Electricity Transmission Company put in place US$600 million of funding to support construction contracts it awarded to a consortium of Orascom Construction and Hitachi ABB Power Grids.

Also last year, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation led a US$566.4 million export credit agency-supported Islamic Commodity Murabaha financing facility for SEC. The 14-year financing is guaranteed by the Swedish Export Credit Agency and funded by the Swedish Export Credit Corporation.