Siemens signs 8 billion euro power deal with Egypt

Wed Jun 3, 2015 12:39pm EDT
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By Georgina Prodhan

BERLIN (Reuters) - German industrial company Siemens (SIEGn.DE: Quote) signed an 8 billion euro deal ($9 billion) with Egypt on Wednesday to supply gas and wind power plants to boost the North African country's electricity generation by 50 percent.

The deal, signed during an official visit of Egyptian President Abdel Fattah al-Sisi to Germany, is Siemens' single biggest order and gives a much-needed boost to its gas and power division which is struggling at home.

The orders expand on memorandums of understanding announced in March with Siemens and other suppliers including General Electric (GE) (GE.N: Quote) as Egypt strives to improve its creaking national grid.

The deal could put the German company, which started doing business in Egypt in 1859, ahead of arch-rival GE. GE said this year it had a 30 percent market share while Siemens claimed a share of 25 percent before the deal.

Egypt is going through its worst energy crisis in decades, with power cuts common as its ageing state-run infrastructure struggles to handle rapidly growing demand for electricity in a country of 87 million people.

Siemens said the installations, when completed, would add 16.4 gigawatts (GW) to Egypt's national grid.

The order includes 24 Siemens' H-Class gas turbines, adding to just 48 Siemens has sold so far. They will power three new gas plants which Siemens said would be the largest in the world.

Orascom Construction (OC) OC.DI, an engineering and building business dual-listed in Cairo and Dubai, said it would construct in consortium with Siemens two combined cycle plants with a total generation capacity of 9.6 GW.   Continued...

People enter a building of Siemens in Berlin November 6, 2014. REUTERS/Hannibal