China’s State Grid secures €50mn EBRD-backed power substation in Egypt

State Grid Corporation of China has secured a contract to build a new 500-kilovolt electricity transformer substation in Egypt, with investments estimated at €50mn, Al Arabiya Business reported on February 17, citing a government official.

The project is expected to enhance transmission capacity, reduce bottlenecks and support Egypt’s ambitions to become a regional energy hub linking Africa, the Middle East and Europe.

The project will be financed by the European Bank for Reconstruction and Development (EBRD) through a loan worth €165mn, signed in December 2025. 

The funding is earmarked for the construction and upgrade of the substation, as well as the development of high-voltage transmission lines to carry electricity generated from renewable energy sources across Egypt.

The initiative forms part of Egypt’s broader strategy to strengthen its national grid and accommodate rising volumes of renewable energy, particularly from wind and solar projects. Expanding high-voltage transmission infrastructure is seen as critical to improving grid stability and ensuring efficient distribution of clean power to demand centres.

Meanwhile, EBRD financing reflects continued international backing for projects aimed at accelerating the country’s energy transition and modernising its electricity network.

The EBRD has invested nearly €13.9bn in Egypt across 209 projects, with initiatives in 2026 focusing on the $25mn expansion of Turkish retailer DeFacto and EGP 350mn ($7.2mn) loan for coastal desalination plants. Future collaboration is shifting toward the "Pact for the Mediterranean," targeting green hydrogen, digital transformation, and technical support to boost the competitiveness of Egyptian exports.

Egypt has accelerated its energy transition, targeting a 42% renewable share by 2030 and over 60% by 2040, with a critical 2026 goal of adding 3GW of solar power and 600 MW of battery storage to the grid.