Energy subsidies will be gradually lifted in the coming three years, raising the price of energy except for factories that have a social dimension, said Hatem Saleh the minister of industry and foreign trade.
“The state bears a heavy bill in supporting the energy sector,” Saleh pointed out, on the sidelines of the Ministry of Finance’s 2nd Annual Public Private Partnership (PPP) Investment Summit, Sunday. “And it is seeking to restructure it through multiple agreements with different economic sectors in order to put forward a plan aiming to reach a fair price for energy.”
He added that the Ministry of Industry currently has 11 licences for cement plants ready to be offered, but which have so far been stalled due to lack of energy supplies, highlighting the ministry’s reticence to offer licences for energy-intensive factories in the light of energy scarcity.
Saleh explained that the Government currently buys oil at about EGP 3,500 per tonne and that it is sold to factories at a cost of up to EGP 1,600 per tonne. The State bears the difference in prices, he said, almost EGP 2,000 per tonne in terms of subsidies, with 100 plants consuming about 70% of industry-oriented energy while the rest is consumed by around 100,000 other factories.
He revealed also that he had agreed to a request by the Egyptian community in Canada and the US to establish an Egyptian company whereby the National Bank of Egypt (NBE) becomes a 10% shareholder in order to ensure good management of the company.
Regarding the recent sukuk law the minister of industry, said: “Sukuk are a financing tool and not an alternative to traditional financial instruments, which will be retained.”
The law, according to Saleh, gives corporations more flexibility in that they can finance projects through sukuk, given that they are separate from the firm’s other activities.