Published On: Thu, Feb 19th, 2015

Egypt Approves Privatizing Electricity, Encouraging Renewable Energy

The government plans for renewable sources to provide 20 percent of Egyptian energy production by 2020.

electric grid

Egypt’s cabinet on Wednesday approved a law privatizing electricity production, distribution and transmission, state-owned news agency MENA reported.

The law limits the state’s role in the electricity sector to regulation and supervision, and separates activities of production, transmission and distribution to ensure competitiveness in the private sector.

Egypt has been suffering from an acute energy crunch as foreign oil companies suspended extraction works over growing arrears, in the aftermath of the popular uprising of 2011.

Parts of the national grid are in need of renovation, according to the report.

Egypt’s government slashed energy and electricity subsidies mid-2014, trying to reform the country’s budgetary imbalance and ultimately eliminate energy subsidies.

“Initially, there will be two markets: one competitive and one in which prices are set by the state. But with the gradual liberalisation of electricity prices over the coming five years, the competitive market will expand to include more consumer segments, ” Hafez El-Salmawy, head of the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) told al-Ahram.

Last September, the government set feed-in tariffs for buying electricity generated by the private sector via renewable energy, including plans for renewable sources to provide 20 percent of Egyptian energy production by 2020.

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