Power Opportunities

An Expert's View about Energy in Egypt

Posted on: 15 Oct 2011

To cope with the surging increase in electricity demand driven by the current socio-economic development, growing at an estimated average about 6%–7% annually, Egypt put an aggressive plan targeting increasing domestic electricity production.

Sector briefing Power Opportunities in Egypt Why Egypt? Egypt has the largest population in the Arab which are subsidiaries to the Egyptian world (approximately 80 million) and is the Electricity Holding Company. fourth-largest economy. Egypt has a strategic location in the centre of the Middle East and To cope with the surging increase in North Africa (MENA) region (800 million electricity demand driven by the current people) and has links to the three continents socio-economic development, growing at an of Asia, Africa and Europe. estimated average about 6%?7% annually, Egypt put an aggressive plan targeting Egypt is signatory to many regional and increasing domestic electricity production by international Free Trade agreements which 8.38 gigawatts (GW) by year 2012. reduce or wave completely the custom duties on exported / imported goods. Events in Egypt since January 2011, and the transition to democracy, have had a negative Electricity generation is almost driven by impact on the economy. Economists forecast conventional technologies; steam thermal that overall growth for FY 2011 will be around power stations, gas turbine and combined 3% rather than the 5.7% which had been cycle and off grid diesel engine generation expected. The transition government has representing about 84.4% whilst hydropower placed a real emphasis on the need to represents about 14.8% and only 0.8% for accelerate economic reform alongside wind technology. democratic developments and improve further the climate in Egypt for international The electricity network reaches almost 99% investment. Analysts are predicting a period of the population. The generation, of economic uncertainty for the next 6-9 transmission and distribution activities are months with a return to higher growth separated although largely in state hands. depending on stability and a return to civilian The Egyptian Electricity Holding Company government. (EEHC) is the government arm managing the power portfolio. If you are looking to invest in Egypt, now is a time for assessing, performing due diligence, The power market is a single-buyer one; all and looking closely at market developments generation companies sell to a governmental in relation to your particular sector. The transmission company ?Egyptian Electricity business to business trading relationship will Transmission Company (EETC)? who then be less affected by recent events and will sells electricity to large customers and the continue throughout the period of political eight distribution companies. This single- uncertainty, though letters of credit will gain buyer system does not allow competition in importance. among generation companies. Egypt's installed generating capacity at For more information about our market 2007/08 was estimated at 22.5 gigawatts please visit Egypt page at: (GW). The Egyptian power system is currently www.ukti.gov.uk/egypt. comprised of seven regional state-owned power production and distribution companies, UK Trade & Investment Sector briefing: Power opportunities in Egypt Opportunities ? Opportunities for the UK companies can ? The Kuwait-based Arab Fund for be available generally in the areas of Economic and Social Development has knowledge transfer or investing in signed an agreement to finance the participating in the coming tenders Egyptian government KWD50mn issued by the ministry to (US$177.5mn) for a power plant. ? Egypt was ranked second in MENA ? The power plant project in Banha will region by Business Monitor International receive funding from the OPEC Fund for for power generation. Power Business International Development (OFID) and Environment rating was based on its the Abu Dhabi Fund for Development. market size and the proportion of When complete, the power plant will renewable (mainly hydro-power) use in have generation a capacity of 750MW. its energy mix. Although the regulatory environment is not yet business ? The World Bank announced in February attractive, the power sector is still 2009 that it will lend Egypt US$ 600 mn competitive with the progress towards to finance the construction of a 1.3GW privatisation. steam turbine power plant. The plant will consist of two 650MW turbines and ? The government targets to produce will be mostly powered by gas. Its 12% of the needed power from wind by completion is expected by 2013. 2020. You can be alerted to business opportunities on ? Egypt's government aim to increase a regular basis by registering on the UKTI electricity generation by 17,000 website. Find out more on UKTI?s business megawatts in its five year plan 2012- opportunities service on the UKTI website. 2017 and Investments of around 120 billion pounds will be made to achieve this aim. UK Trade & Investment Sector briefing: Power opportunities in Egypt Major events and activities UKTI contacts Marwa Hussein ELECTRICX POWER Adviser, Trade & Investment The 19th Middle East & North Africa Power & British Embassy RE Exhibition 7 Ahmed Ragheb St, Garden City, Cairo, Egypt Tel 00 20 22 791 6000 www.electricx-egypt.com Fax 00 20 22 791 6130 Organiser: EGY-TEC Engineering Company Email: marwa.hussein@fco.gov.uk Tel: 27353877-27359801-23028690 www.ukti.gov.uk Fax: 27358801 Gary Hunt Email: info@egytec.com, Deputy Director, Trade & Investment, Website: www.egytec.com Egypt Amr G. Shawki, Managing Director British Embassy 7 Ahmed Ragheb St, Garden City, Cairo, Egypt North Africa Technology Conference & Tel 00 20 22 791 6061 Fax 00 20 22 791 6130 Exhibition - Energy Management in a Email: gary.hunt@fco.gov.uk Challenging Economy www.ukti.gov.uk Organiser: Society of Petroleum Engineers (SPE), http://www.spe.org/events/natc/ email : rkamal@spe.org New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis. UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Power opportunities in Egypt Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Egyptian market are advised to you to meet contacts and promote your undertake as much market research and company in the Egyptian market planning as possible in the UK. UKTI?s team in Egypt, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Egyptian market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Power opportunities in Egypt
Posted: 15 October 2011

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