Egypt and Saudi Arabia on Tuesday awarded contracts to connect the two nation’s power grids, in a project that could allow the countries to exchange as much as 3 gigawatts of electrical capacity.

Orascom Construction and Hitachi ABB Power Grids will undertake the work in Egypt, while a separate consortium of Hitachi ABB and SSEM will carry out the work in the kingdom, Orascom said in a statement.

The high-voltage direct current project will allow both countries to exchange up to 3GW at peak times, and supply power to about 20 million Egyptian homes or 2.3 million Saudi households, according to Hitachi ABB. Egypt’s state-run Middle East News Agency said it would cost around $1.8 billion.

Under the terms of the deal, Hitachi ABB Power Grids-Orascom Construction will build the HVDC converter station in northeast Cairo and the transition station in Sinai. The first stage is scheduled to be operational in late 2024, with a capacity of 1.5GW, with the rest coming online in mid-2025.

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