Electricity & Power Generation in Egypt

An Expert's View about Energy in Egypt

Last updated: 23 Feb 2011


Egypt is the largest energy producing country in the Middle East. With its high population growth and growing economy, electricity consumption tripled over the last 20 years. Overall demand for electricity is growing at an annual rate of 7%, making it a highly lucrative sector for foreign and local investments. The Ministry’s current maximum load consumption of over 12,000 megawatts is met by the over 15,000 megawatts of existing installed capacity. However, the government has plans for an additional 14,000 megawatts of electrical power capacity by 2012. This represents a doubling of the existing electricity capacity and entails additional investments of $7.9 billion, of which $5 billion is expected to be provided by the Build, Own, Operate, Transfer (BOOT) model with the private sector.


Egypt's power sector is currently comprised of seven regional state-owned power production and distribution companies that are held by the Egyptian Electricity Authority (EEA). In July 2000, the EEA was converted into a holding company, though still owned by the state. Egypt has several privately-owned power plants currently under construction which are financed under Build, Own, Operate, and Transfer (BOOT) financing schemes.


The first BOOT project was a gas-fired steam power plant with two 325-megawatt (MW) generating units, located at Sidi Krir on the Gulf of Suez. The plant cost $450 million, and began commercial operation in late 2001. U.S.-based InterGen (a joint venture of Bechtel Enterprises and Shell Generating Ltd.), along with local partners Kato Investment and First Arabian Development and Investment, have the 20-year BOOT contract for Sidi Krir. The second BOOT power project award went to Electricite de France (EDF), for two natural gas-fired plants located near the cities of Suez and Port Said. The two plants, which came online in 2003, have a total capacity of 1,366 MW. In February 2006, the World Bank agreed to fund a 700-MW plant expected to cost roughly $260 million, which will contain two 350-MW steam turbines.


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The Ministry of Electricity is enacting for the first time a plan to partially privatize domestic electrical production. The government, through the Electricity Holding Company, which is currently Egypt’s sole producer of electricity, a service for which it incurs an annual deficit of LE 7 billion. Now, in an effort to reduce debt, the government will begin selling contracts to private firms, who will co-own plants with the government.


The government plans to liberalize the energy sector gradually to reduce its debt and subsidy burden, and restructure the sector to allow more private sector participation. Over the next 5 years, Egypt plans to expand electricity capacity to 32,000 megawatts (MW). The additional capacity will come principally from 11 new thermal plants and expansions: Kureimat 2 and 3, Talkha, Tabbin, Nuberiya 3, Cairo West, Sidi Krir, el-Atf, Abu Qir, Ain Sokhna and Sharm el-Sheikh.



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Posted: 08 June 2010, last updated 23 February 2011

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