Egypt reserves $1.4 billion for electricity grid generation

Egypt has reserved about $1.4 billion in its coffer for the developments of the country’s electricity grid network, the country’s electricity minister Mohamed Shaker stated.

In April, Egypt signed an agreement with the Arab Fund for Economic and Social Development to develop the electricity transmission network worth 60 million Kuwaiti dinars (US$200 million).

As Egypt struggles to strike a balance between production, domestic consumption and export revenue in the face of internal political turmoil, the energy sector witnesses a variety of conflicting and overlapping challenges.

Currently, the country’s energy status is on reversal despite Egypt being the largest non-OPEC oil producer in Africa and the second largest gas producer on the continent. The power plants that feed the national grid, the distribution networks and the grid itself are state-owned.

Last year, the Ministry of Electricity and Renewable Energy (MoEE) stated that there are plans to spend $6.9bn on the addition of more than 13.9 GW between 2018 and 2019. In 2015/16 fiscal year, Egypt disbursed a total of $2.8bn to bring on 3.5 GW of new generation capacity and for transmission and distribution improvements.

The ministry’s overall estimate is that another 54 GW of new capacity will be needed by 2022, and it hopes private investors will play a major role in reaching that as it intends to award contracts to build the generation capacity by 2019.

Residential electricity consumption accounts for 45.3 percent of the total electricity distribution in the country, while the industrial segment accounts for 29.5 percent. Both jointly represent 75 percent of total demand while all other segments account for the remaining 25 percent.