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World Bank to Help Build a Smart Grid for the Middle East

A massive World Bank-funded infrastructure project could link electrical grids throughout the Middle East.

World Bank to Help Build a Smart Grid for the Middle East


The World Bank has announced plans to ramp up infrastructure investment in the Arab world over the coming years. At a Cairo press conference on December 25, World Bank managing director Mahmoud Mohieldin gave details on proposals to create two mega-electrical grids. One will be located on the Arabian peninsula and the other will link the electric grids of Egypt, Saudi Arabia, the Sudan and (possibly) Ethiopia.

Egyptian daily al-Masry al-Youm reports:

At a press conference in the World Bank’s Cairo office on Saturday, Mohie Eddin said the bank is currently considering funding an electricity network linking the eastern countries of the Arab World, as well as projects linking Egypt with Saudi Arabia and Sudan, and possibly Ethiopia, and potential projects linking with the western countries of the Arab World.

The bank will not fund nuclear power plants as these do not fall within the bank’s funding policies, which are limited to renewable energy projects such as wind and solar power, said Mohie Eddin. He also mentioned that the bank does not interfere in the education policies of the countries in which it funds projects.

Translation: The World Bank will not attempt to strong-arm Saudi Arabia over their sex-segregated educational system. Mohieldin is a former Egyptian government minister with close ties to Hosni Mubarak. (The difference in the spelling of his name is due to alternate transliterations from Arabic to English.) Details on the plan are available here.

The World Bank has been active in regional power development. Earlier this year, the World Bank offered $180 million in credit towards rebuilding Ethiopia's power grid. More than 80% of Ethiopians lack access to steady electricity. A large-scale urban project in Turkey connected Turkey's power grid to the larger European power grid as well.

World Bank energy policies have not escaped criticism, however. Despite commitments to using alternative and renewable energy sources, the World Bank has also put billions of dollars into the construction of coal-fired power plants. Some groups have argued that World Bank energy policies unfairly favor the rich.

Meanwhile, in Egypt itself, a World Bank report found that government subsidies are diverted towards the wealthiest citizens:

A report published by the World Bank earlier this month said that nearly half of all subsidies in Egypt goes to the richest 60 percent, even though the use of subsidies could provide better living circumstances for at least 63 percent of the country’s poor.

Bernard Funck, the World Bank representative for Social and Economic Development in the Middle East and North Africa, said in comments to reporters that the study also showed a need for Cairo to look into reducing the overall use of the subsidy program, noting that "there is a great loss of resources directed to subsidies and that the country can achieve the same goal with fewer resources."

While details on the electrical grid project have not yet been released, the World Bank is currently involved in several interesting infrastructure projects within Egypt. In June of 2010, the World Bank sent Egypt a $220 million loan to develop wind energy sources. This was followed by a $270 million investment-loan package to build a massive solar power plant.

[Image of electrical cables at Aswan, Egypt via Wikipedia user Rémih]

Follow the author of this story, Neal Ungerleider, on Twitter.