Egypt is set to begin construction of a 500kV transformer station, one of its most ambitious power transmission projects to date, as part of a major effort to expand and stabilise its national electricity grid.

The project will also include a 100-kilometre (62-mile) ultra-high voltage transmission line, significantly enhancing the capabilities of the Egyptian Electricity Transmission Company (EETC) to meet rising national demand, especially during peak summer periods.

The development is being supported by a $256 million funding package from the European Union (EU) and the European Bank for Reconstruction and Development (EBRD). The agreement, scheduled to be signed in November 2025, includes a €200 million ($232 million) loan and a $23 million EU grant.

Expected to be operational by mid-2026, the new transformer station will play a critical role in boosting transmission capacity and supporting grid reliability as Egypt expands both conventional and renewable energy sources.

According to sources cited by Asharq Business, EETC is also investing an additional $232 million in related infrastructure, including the construction of new power plants and further grid reinforcements.

The initiative forms part of a broader €7.4 billion ($8.6 billion) EU assistance framework agreed in March 2024 to support Egypt's economy, with energy infrastructure as a key pillar. Release of the funds is contingent on continued compliance with reforms under the International Monetary Fund (IMF) programme.