The World Bank has approved a $500m loan to Egypt for delivering natural gas to approximately 800,000 houses.
(AFP File Photo)
The World Bank has approved a $500m loan to Egypt for delivering natural gas to approximately 800,000 houses, according to Khaled Abdel Badie, chairman of the state-run Egyptian Natural Gas Holding Company (EGAS).
Abdel Badie indicated, in a statement to Daily News Egypt, that procedures for obtaining the loan from the World Bank, which will provide the gas in the next fiscal year, are currently underway.
He added that that the loan is part of the government's plan to deliver natural gas to homes over the next three years.
The Ministry of Petroleum is looking to increase domestic natural gas usage to ration butane consumption, which makes up a large portion of subsidies on petroleum products.
A senior government official said that Egypt is also negotiating another loan with the French Agency for Development (AFD) that amounts to $100m. There is another potential grant from the European Union (EU) worth another $100m, to complete the financing of gas delivery to homes, the official said.
Since July 2013, the Egyptian government's target has been to deliver natural gas to 8m housing units within five years.
Gas has been delivered to 6m housing units through the last 30 years, according to the official.
The Ministry of Finance funds for natural gas subsidies in the draft budget for the last fiscal year (2013/2014) amounted to approximately EGP 8.11bn. Butane subsidies for this fiscal year’s budget stands at EGP 22.87bn. Due to the high cost of providing butane subsidies as opposed to natural gas, the government is seeking to encourage citizens to decrease gas consumption in their homes.