Introduction:
Egypt's Ministry of Electricity has announced that "Power Interconnection Between Egypt-Saudi" will start completely in next few weeks. This project is 500 KV High Voltage Direct Current (HVDC) which is first project here in Middle East. The purpose of this project is to connect electric substations of both countries so peak hours will be utilized. Testing and commissioning work in Badr City (Egypt) has done successfully and it is ready for commercial operation now.
Technical Project Details:
| Feature | Details |
| Total Capacity | 3,000 Megawatts (MW) |
| Voltage Technology | 500 kV HVDC (High-Voltage Direct Current) |
| Total Length | ~1,350 km (Overhead lines + Submarine cables) |
| Key Stations | Badr City (Egypt), Tabuk (KSA), East Madinah (KSA) |
| Submarine Cable | 22 km (Crossing the Gulf of Aqaba) |
| Project Cost | Approx. $1.8 Billion |
| Major Contractors | Hitachi Energy, Orascom Construction, Prysmian Group |
Deep Analysis and Impact of This Project:
- Electricity consumption in Egypt and Saudi Arabia has different timescale. Egypt needs electricity in evening time while Saudi Arabia needs more electricity during noon time. This project enable both countries to transfer electricity so there will be no need of installing new power plants. So the use of existing power plants will be better.
- When two countries will exchange cheap electricity on demand, so there will be no need of running power plants on expensive oil. It will not only lessen fuel consumption but also lessen carbon emissions which will be environmental friendly.
- This project is not limited between two countries. This will act as a energy bridge which has ability to connect Africa, Europe, and Asia. Egypt and Saudi Arabia will be center point in region to export energy.
Main Companies (Contractors):
| Scope of Work | Company Name | Project Name |
| HVDC Converter Stations | Hitachi Energy (Consortium Leader) | Design and supply of advanced converter technology at Badr (Egypt), Tabuk, and Madinah (KSA). |
| Submarine Cables | Prysmian Group (Italy) | Manufacturing and laying of 500 kV HVDC subsea cables across the Gulf of Aqaba (approx. 22 km). |
| Civil Works & Local Infrastructure (Egypt) | Orascom Construction | Construction of converter stations, switching stations, and civil infrastructure on the Egyptian side. |
| Civil Works & Local Infrastructure (KSA) | SSEM (Saudi Services for Electro Mechanic Works) | Execution of electromechanical and civil works for stations within Saudi Arabia. |
| Overhead Transmission Lines (Egypt) | China Electric Power Equipment & Tech (CET) / Giza Cable Industries | Installation of 500 kV overhead lines (OHTL) and towers from Badr City to the Sinai coast. |
| Overhead Transmission Lines (KSA) | Larsen & Toubro (L&T) / National Contracting Co. | Construction of the massive overhead line network connecting Tabuk and Madinah. |
| Project Management (PMO) | AtkinsRéalis | Engineering design review and overall project management consultancy. |
Financial Model of This Project:
| Category | Details | Key Highlights |
| Total Estimated Cost | $1.8 Billion (Approx.) | Shared investment between Egypt and Saudi Arabia. |
| Funding Model | Sovereign Financing | Funded through government-backed loans and national utilities. |
| Major Financer (KSA) | Saudi Electricity Company (SEC) | Primary investor for the Saudi side of the infrastructure. |
| Major Financer (Egypt) | Egyptian Electricity Transmission Company (EETC) | Responsible for the Egyptian portion and station works. |
| Development Banks | IsDB, AFESD, & Kuwait Fund | Multi-lateral banks providing long-term, low-interest loans. |
| Revenue Stream | Power Purchase Agreements (PPA) | Trading electricity based on hourly market rates and peak demand. |
| Asset Ownership | Bilateral Ownership | Each country owns and maintains the assets within its territory. |
Both countries will bear expenses in their own countries of installation and construction of overhead transmission line. It means Saudi Electricity Company (SEC) and Egypt Electricity Transmission Company (EETC) are the major player in their own countries.
The cost of installation of 22 Km submarine cable in Gulf of Aqaba is on 50/50 share because it comes under neutral territory.
The return on investment of this project is 3 to 5 years. The reason is both countries will exchange cheap electricity instead of high price oil. They will save billions of dollar in the name of fuel.
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