79294
                              Arab Republic of Egypt: Helwan South Power Project

                                                SUMMARY OF DISCUSSION

                                              Meeting of the Executive Directors

                                                               June 27, 2013


       Executive Directors approved the loan for the Helwan South Power Project for the Arab
Republic of Egypt in the amount of USD 585.4 million on the terms and conditions set out in the
President’s Memorandum (R2013-0112).

        Directors noted the macroeconomic and social challenges associated with the ongoing
economic and political transition in Egypt. They underscored the importance of Bank
engagement to contribute to stability and protection for poor and vulnerable segments of the
population, despite the risks in the operating environment. In this context, they underscored the
importance of fiduciary controls and careful monitoring and management. Directors particularly
welcomed the Helwan South Power Project’s contribution to development of Egypt’s energy
sector by providing electricity to fuel economic growth, enhancing the operating environment for
private companies, creating jobs, and increasing access to reliable and affordable energy.
Directors noted that the focus on governance - including accountability, efficiency and social
inclusion - responds to the call for openness and accountability in Egypt’s public sector. They
acknowledged the importance of addressing key energy sector issues, and commended the
Egyptian authorities’ commitment to energy tariff and subsidy reform.

       Directors underscored the importance of financial and operational sustainability of the
Egyptian Electrical Holding Company, which will enable routine maintenance and additional
investments in energy efficiency and new energy sources, consistent with the country’s long-
term strategy for the sector. In this regard, they noted the need to ensure that future tariff
adjustments allow for financial sustainability of the company. Directors also emphasized the
importance of mainstreaming gender into the project, as well as the need for strengthened social
safeguards and grievance redress mechanisms.

        Directors appreciated that the project design leverages Bank assistance with regional and
international partnerships that will provide technical assistance and advisory services, largely
funded by the Deauville Partnership and the EU. Directors strongly welcomed the contributions
of the OPEC Fund for International Development, the Kuwait Fund for Arab Economic
Development, the Islamic Development Bank, and the Arab Fund for Social and Economic
Development in this important project. They also highlighted the role of South-South learning as
part of client support, particularly to inform the design of subsidy reforms, and encouraged staff
to build upon this experience to benefit other Bank Group clients.



                                                            
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  This summary is not an approved record.