Egypt gets $200 mln loan for electricity project

CAIRO, Jan 14 (Reuters) - The Arab Fund for Economic and Social Development has agreed to lend Egypt $200 million to upgrade an electricity station at Abou Kir in northern Egypt, an Egyptian minister said on Monday.

International Cooperation Minister Faiza Abu el-Naga told reporters the loan would be repaid over 26 years, starting after 6 years, with an annual interest rate of 3 percent.

The loan will be used to raise the output of the station in Abou Kir, near Alexandria, to 1,300 megawatt, in order to meet the increasing demand on energy, Abu el-Naga said.

Egypt has been seeking to diversify its energy resources and launched a nuclear programme for peaceful purposes in 2007 as the local economy was growing in 2006/2007 at its fastest rates in decades.

On Sunday, Egypt's Orascom Construction Industries OCIC.CA(OCICq.L: Quote, Profile, Research) said it had received an invitation from the state-owned West Delta Electricity Production Company to sign a contract to build another station in Sidi Kerir, also on Egypt's northern Coast.

OCI gave no further details on the deal, which Egyptian media have said was worth 560 million Egyptian pounds ($102.6 million). ($1 = 5.46 Egyptian pounds) (Reporting by Abdel Latif Wahba; writing by Wael Gamal; editing by David Christian-Edwards)