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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.

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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
.

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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.