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Monday, 25 November 2019

Actis confirms it’s bidding for a stake in Egypt’s combined cycle plants

Actis has confirmed it is in the running to acquire a stake in a combined-cycle power plant: Private equity giant Actis has formally submitted a letter of intention to acquire a stake in the Siemens / Orascom Construction / Elsewedy Electric combined-cycle power plants, Sherif El Kholy, partner and head of Middle East and Africa at Actis, tells Hapi Journal. Sources had told Bloomberg earlier this month that Actis is among those bidding for the stake, but the company had declined to comment at the time. Actis is competing alongside France’s Engie, China Datang Overseas, Blackstone Group’s Zarou, and Edra Holdings. Electricity Ministry sources had said previously that Zarou had submitted the best financial offer, making it the top contender.

Actis is looking to get a piece of all three power plants once Egyptian sovereign wealth fund Tharaa begins to offer up stakes in the other two. According to El Kholy, Actis wants to hold at least 51% of the three plants in Burullus, the new administrative capital, and Beni Suef.

Background: Tharaa CEO Soliman said earlier this month that an agreement to sell a stake in only a single plant is expected to be finalized in less than a year. Stake sales in the other two plants would then follow. He also said that the fund is planning to acquire 30% of the plants’ equity, and offer the remaining stake to an international investor as part of its efforts to encourage foreign participation in the economy. Post-sale, the shareholders could establish a joint venture that would then sign a power purchase agreement to sell the plants’ output to the government. There are two other scenarios that the fund is looking at, including one in which it takes a 60-70% stake in the plants, leaving a minority stake for the private sector. The three 14.4 GW plants were co-built by Siemens, Orascom Construction, and Elsewedy Electric, and were inaugurated in July 2018.

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