Saudi Arabia and Egypt will both connect their electric power network in a new project that will potentially enable power trading between the Middle East and North.
The power grid project is expected to cost $1.6bn with contracts expected to be signed in the first half of 2018.
Mohamed Shake, Egypt’s electricity minister, said that Egypt would pay up to $600mn for the project expected to be completed within two years from execution date.
He said that the network would enable linked countries to import or export power.
"It will enable us to benefit from the difference in peak consumption,” Shaker said. “The reliability of the network will also increase.”
The link with Saudi Arabia could have a capacity of 3,000 megawatts, he said. Egypt has a 450-megawatt link with Jordan and one with Libya at 200 megawatts, the minister said.
Egypt will seek to use its strategic location to connect power grids in Asia and elsewhere in Africa, he said, according to Bloomberg.
Transmissions of electricity across borders in the Gulf became possible in 2009, when a power grid connected Qatar, Kuwait, Saudi Arabia and Bahrain. The aim of the grid is to ensure that member countries of the Gulf Cooperation Council can import power in an emergency.