Government presents plans to create competitive investment in Egypt’s electricity market

Mohamed Alaa El-Din
6 Min Read

The first session of the third annual energy conference titled “Energy and sustainable development” and held under auspices of Business News Egypt has addressed the government’s plan to create a competitive electricity market and set up management rules as well as liberalise energy prices.

The session also discussed the projects contracted by the Ministry of Electricity to secure Egypt’s energy needs, and the state’s procedures for retrofitting electricity grids. The participants also reviewed the government’s efforts to find new financing sources, with the tentative plan to turn to the Egyptian Exchange to list several companies for initial public offering (IPO).

The session was led by Sabah Mashaly, the Ministry of Electricity’s first undersecretary for development, who said that the ministry has added 6,882 MW to the national grid through the construction of several power plants and has issued the Electricity Law No. 87 of 2015, as well as the feed-in- tariff law.

Mashaly reviewed the ministry of electricity’s plan to meet domestic demand for electricity this summer. The ministry added 3,500 MW to the electricity grid in 2015-2016, investing EGP 52bn in the electricity production sector, EGP 12bn in electricity transmission, and EGP 10bn in distribution.

The Ministry of Electricity aims to add an additional capacity to produce 8,000 MW in 2016-2017 and 13,900 MW in 2017-2018, with EGP 130bn investments into production.

According to Mashaly, the ministry plans to invest EGP 140bn to add 52 GW in production by 2030.

She pointed out that 4% of the total electricity capacity will be produced by nuclear plants, as the first two units of the Dabaa nuclear power plant are expected to be concluded in 2023.

Meanwhile, 15% of the target capacity will be produced from coal, in coordination with the Ministry of Environment.

Clemens noted that the energy market in Egypt witnessed a number of significant developments during the last period, mostly lifting the energy subsidy and passing the feed-in-tariff law, as well as the discovery of new gas fields in the Mediterranean Sea, in addition to repaying the dues of foreign companies conducting oil exploration initiatives in Egypt and issuing the electricity law which will guarantee organised competition based on consumption concepts.

Clemens added that the Egyptian electricity law seeks to liberalise electricity prices in the market.

She explained that the European Investment Bank (EIB) has loaned €3bn to energy projects in Egypt since the 1990s. The financed projects included projects to transfer and refine natural gas and electricity, in addition to the Gulf of Zayat plant for wind energy production, and a number of other projects in Damietta.

She pointed out that the bank requires a specific minimum level for funding the project of a 50 mw capacity, or a value that ranges between $50m and $100m.

Medhat Fayek, the vice chairman of ABB Group, said that the company is a main partner in the majority of the Ministry of Electricity’s work.

Ahmed Afify, the vice chairman of the Talaat Moustafa Group, believes that for years, the group has depended on smart energies, which has reduced water consumption by 40% and electricity consumption by 26% in the Madinty project.

The Electric Utility and Consumer Protection Regulatory Agency approves 56 temporary licenses of solar energy production companies

The Egyptian Electric Utility and Consumer Protection Regulatory Agency (ERA) has approved 56 temporary licences for electricity production companies dependent on solar energy, according to chairman of the agency, Hatem Waheed.

Waheed told Daily News Egypt that the agency is awaiting the conclusion of the companies’ procedures in order to obtain financing from banks and submit the necessary papers to turn their temporary licenses into permanent licenses.

During his speech in the first session of the third annual energy conference organised by Business News Egypt, Waheed said that the new electricity law will help establish a competitive electricity market that includes parties from both the public and the private sector, which will ensure the quality of the service for competitive prices that serve consumers.

The new law allows citizens who own solar panels to produce and sell electricity through contracts with electricity companies, where electricity transfer companies will handle the transfer process of the amounts of electricity agreed upon according to the regulatory framework stipulated by the law.

He went on to explain that with the activation of the new law, the electricity transfer company will be separated from the Egyptian Electricity Holding Company (EEHC), in order to ensure transparency and independence according to specific regulations.


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