Egypt has signed preliminary deals with Kuwait's Alghanim International for two energy-related projects worth a total of $1.6 billion, its prime minister said in a statement on Wednesday.

One initiative would see four gas-powered plants converted to operate on combined cycle, while the other would establish gas-powered plants with a total capacity of 900 megawatts.

The statement did not specify a timeframe for the Kuwaiti projects. Privately-owned Alghanim International is part of the Fouad Alghanim & Sons Group, one of the biggest conglomerates in the Middle East.

The government's effort to encourage private investment to renovate the creaking national grid -- which began with initial reforms to costly energy subsidies last year -- seems to be bearing fruit.

Siemens won a contract last month to supply four turbines to a power plant, and days later General Electric Co said it had delivered a majority of the turbines for a project to provide 2.6 gigawatts of power by May.

Energy is a politically important issue in Egypt, where power cuts have become commonplace even in the capital Cairo. Blackouts deepened discontent with Islamist President Mohamed Mursi before his ousting in July 2013.

An ageing state-run infrastructure has total energy generation capacity of about 30,000 MW and is increasingly unable to handle the burden of rapidly growing demand in a country of 87 million people.

Gas shortages have also worsened as dwindling local production has failed to meet domestic demand and export commitments.

Rising energy consumption and decreasing production have turned Egypt from a net energy exporter to a net importer in the past few years. – Reuters