CAIRO, Sept 11 (Reuters) - Egypt has signed a $500 million loan with the World Bank to provide natural gas to Egyptian households, the government said in a statement on Thursday.

The loan will help fund a Petroleum Ministry plan to connect 850,000 Egyptians, particularly in largely rural Upper Egypt, to a natural gas grid, Minister of International Cooperation Najla Ahwani said in the statement.

Egypt will pay back the World Bank loan over 30 years, with a five-year grace period.

The country is experiencing its worst energy crisis in decades, due to declining gas production, rising consumption and generous power subsidies.

Foreign energy firms are wary about investing in the country as the government has decided over the past year to divert most gas earmarked for export to the power-hungry domestic market.

The government also signed an agreement with the European Union for a 67.6 million euro grant to fund short-term jobs for unskilled workers who are unemployed.

Egypt's unemployment rate is 13.4 percent, up from 9 percent in 2010 before the ouster of President Hosni Mubarak, the planning minister said last week. (Editing by Catherine Evans)