VZCZCXRO0502
PP RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHEG #0025/01 0061401
ZNR UUUUU ZZH
P 061401Z JAN 09
FM AMEMBASSY CAIRO
TO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 1297
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
INFO RUEHEE/ARAB LEAGUE COLLECTIVE

UNCLAS SECTION 01 OF 02 CAIRO 000025 
 
SENSITIVE 
SIPDIS 
 
NEA/ELA FOR SCHALL 
ISN FOR BURKART AND HUMPHREY 
DOE/NNSA FOR ROBINSON AND ERICKSON 
DOC FOR LOPP 
 
E.O. 12958: N/A 
TAGS: ENRG KNNP ECON ETRD EAID EG
SUBJECT: BECHTEL WINS NUCLEAR TENDER; ELECTRICITY MINISTER 
CALLS FOR CLOSER COOPERATION ON CIVILIAN NUCLEAR ENERGY 
 
REF: A. 08 CAIRO574 
     ¶B. 08 CAIRO1307 
     ¶C. 08 CAIRO1359 
     ¶D. 08 DOHA827 
     ¶E. 08 STATE127423 
 
SENSITIVE BUT UNCLASSIFIED. 
 
¶1. (SBU) SUMMARY:  Ambassador met with Minister of 
Electricity and Energy Dr. Hassan Younes and the Chairman of 
the Nuclear Power Plants Authority (NPPA) Dr. Yassin Ibrahim 
on December 31 to discuss Egypt's plans to develop a civilian 
nuclear energy program.  GOE awarded a $188 million 
consulting services contract to Bechtel on December 23, to 
assist them with the technology and design survey for Egypt's 
first nuclear power plant.  Ibrahim asked for U.S. assistance 
to finance part of the Bechtel contact.  He noted that the 
draft Nuclear Research and Energy law will be submitted to 
the People's Assembly for review by late January.  Minister 
Younes said that the GOE will shortly submit a proposal to 
the embassy requesting technical assistance on a range of 
civilian nuclear energy and research issues, particularly in 
the area of education and training. END SUMMARY. 
 
¶2. (SBU) Minister of Electricity and Energy Dr. Hassan Younes 
and Dr. Yassin Ibrahim, Chairman of the Nuclear Power Plants 
Authority (NPPA), updated the Ambassador on December 31 on 
Egypt's plans to pursue a civilian nuclear energy program. 
The minister confirmed that Bechtel, a U.S. engineering and 
energy services company, won the GOE's tender to provide 
consulting services to the Ministry and NPPA for Egypt's 
civilian nuclear energy program, estimated to be worth $188 
million.  The Ambassador thanked Minister Younes and Ibrahim 
for the GOE's support for U.S. companies and reiterated the 
U.S.'s commitment to working with Egypt in support of safe 
and secure civilian nuclear research and energy, including 
emergency management (refs A, B, & C).  The Ministry made the 
tender result public on December 23, with limited press and 
public reaction.  According to Younes, the GOE is also 
finalizing its renewable energy policy in the coming weeks, 
which he believes will provide incentive for foreign 
investment and private sector growth in the generation of 
energy. 
 
¶3. (SBU) Dr. Ibrahim said that he intends to sign the final 
consulting services contract with Bechtel in early February. 
The NPPA has designed a 3-stage process for the development 
of the nuclear energy program. In Phase I, Bechtel and the 
NPPA will focus on site selection, a design survey, a 
technology survey, decision on a long-term fuel supplier, and 
an environmental impact review. (NOTE: Ibrahim noted that 
Al-Dahba, 160 kilometers from Alexandria, is the GOE's 
preferred location for the first nuclear power plant. END 
NOTE)  The NPPA intends to announce the construction tender 
for the power plant in Phase II, expected to commence in 
¶2010.  Construction of the plant will be relegated to the 
final phase, from 2012-2019.  Ibrahim specified that the 
NPPA's role will be to build and operate the nuclear power 
plant.  Eventually, the NPPA will privatize the distribution 
of electricity generated from the nuclear plant. 
 
--------------------------------------------- -- 
NEXT STEPS: PARLIAMENTARY REVIEW OF NUCLEAR LAW 
--------------------------------------------- -- 
 
¶4. (SBU)  Ibrahim told the Ambassador that the draft Nuclear 
Research and Energy Law will be submitted to the People's 
Assembly for review later this month.  The main element of 
the law involves the establishment of an independent nuclear 
regulatory body, under the auspices of the office of the 
Prime Minister, as well as the reorganization of GOE 
bureaucratic responsibilities for civilian nuclear research 
and safety issues. 
 
--------------------------------------------- ----------- 
REQUESTING U.S. ASSISTANCE TO FURTHER DEVELOP CIVILIAN 
NUCLEAR RESEARCH PROGRAM 
--------------------------------------------- ----------- 
 
¶5. (SBU) Following up on earlier discussions with Ambassador 
Jackie Wolcott, Special Envoy for Nuclear Nonproliferation 
(refs B & D), Minister Younes told the Ambassador the GOE is 
eager to expand its technical cooperation with the U.S.  He 
noted that the Ministry will shortly send the embassy a 
 
CAIRO 00000025  002 OF 002 
 
 
detailed proposal for technical cooperation.  (NOTE: We 
expect that the Ministry will hold this proposal until the 
People's Assembly reviews and approves the draft nuclear law. 
END NOTE.)  Younes said that the GOE will seek assistance 
with establishing its new regulatory agency, and training 
staff for this agency. Ibrahim said that the GOE needs 
technical assistance in safety and security standards as well 
as developing its human resources across the civilian nuclear 
field. 
 
¶6. (SBU) Ibrahim asked the Ambassador for financial 
assistance from the U.S. to finance part of the Bechtel 
contract.  The Ambassador explained funding constraints for 
this type of project, and recommended that NPPA work with 
Minister of International Cooperation (MIC) Fayza Aboul Naga 
to receive support from the local currency account jointly 
managed and programmed by MIC and USAID.  The Ambassador also 
suggested the GOE seek financing from the U.S. Export-Import 
Bank. (NOTE: Prior to the bid decision, Embassy's Commercial 
Office discussed financing possibilities with EX-IM, which 
expressed interest in supporting the U.S. bidders.  Bechtel 
will contact Ex-Im to pursue financing options. END NOTE.) 
SCOBEY