The European Investment Bank, the Islamic Development Bank and the Saudi Fund for Development will also help finance the project
The Arab Fund for Economic and Social Development will lend 30 million Kuwaiti dinars ($106m) to help pay for construction of a 750-megawatt power plant in Syria, the Syrian Arab News Agency reported on Wednesday.
The $891m power station is to be built in the eastern province of Deir Ezzor by Metka SA, Greece’s biggest builder of electricity plants, and Ansaldo Energia SpA, a unit of Finmeccanica SpA of Italy.
Syria’s parliament ratified the Arab Fund loan agreement on Wednesday, the state-run agency said. The European Investment Bank, the Islamic Development Bank and the Saudi Fund for Development will also help finance the plant, according to the Electricity Ministry website.
Syrians have suffered for years from electricity outages, due largely to the country’s old and overburdened power plants and distribution networks. The government plans to spend about $7.5bn on power projects under a five-year plan, the official SANA news agency reported on December 16, citing Electricity Minister Ahmad Kayali. Syria passed a new energy law on November 14 allowing foreign and private local investors to generate and distribute electricity.
Metka has a 76.5 percent stake in the Deir Ezzor project and Ansaldo the rest, according to a statement that the Greek company issued on October 21 when it announced the signing of the contract with Ansaldo.
Syria’s electricity output rose by eleven percent and its power exports by 65 percent in the first 10 months of this year, compared with the year-earlier period, the Electricity Ministry said in an e-mailed statement on December 9.
The International Monetary Fund has urged Syria to speed its transition to a market-based economy while reducing its dependence on the oil industry. The country is trying to reverse a decline in crude production, which peaked at 583,000 barrels a day in 1996. The government has forecast that production will drop to 380,000 barrels a day this year.