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Sunday, 12 July 2020

Egypt: Electricity ministry working to phase out subsidies by 2012/2022

A plan has been in place since 2015 to phase out subsidies over a 5-year period, but this was later extended until 2021-22 following directives by President Sisi to ease the burden on consumers

Ghada Raafat , Thursday 7 Feb 2019
Electricity updates
Electricity updates
Views: 8549
Views: 8549

A joint team from the Ministry of Electricity and Renewable Energy and the Egyptian Electrical Utility and Consumer Protection Regulatory Agency is currently working on plans to gradually phase out electricity subsidies.

A plan has been in place since 2015 to phase out subsidies over a five-year period, but this was later extended until 2021-22 following directives by President Abdel-Fattah Al-Sisi to ease the burden on consumers.

Ayman Hamza, a spokesman for the Ministry of Electricity and Renewable Energy, said the state was subsidising electricity prices by LE46.7 billion in the 2018-2019 fiscal year.

Around a quarter of that amount is borne by the Ministry of Finance, and another LE10 billion will be covered by the cost of selling electricity to higher-consumption brackets excluded from electricity subsidies, in addition to energy-intensive industries that pay higher prices.

However, that still left some LE21 billion yet to be covered in the current fiscal year, Hamza said, adding that the ministry would not raise electricity prices before July.

Some consumers have complained that false meter readings of electricity consumption have led them to pay more than they consume, Hamza said, adding that the minister was always eager to receive complaints about incorrect readings through its dedicated hotline 121.

Since the hotline was established in August 2016, it had received more than five million calls, he said. Mobile applications can also be used to calculate bills or register billing complaints, he said, which can be sent by SMS to 91121.

All complaints received through the different channels would be promptly resolved, Hamza said.

The ministry has been increasingly installing pre-paid electricity meters to overcome a shortage of manpower and to encourage users to rationalise their energy usage. Around seven million prepaid meters have already been installed, but there are still 23 million regular meters in place that require reading.

The number of readers does not exceed 10,000, however, half the number needed to cover the whole country, Hamza said. This situation had prompted the ministry to seek help from a private company, he added.

According to Hamza, the ministry aims to replace all the traditional meters with smart and prepaid ones within the next 10 years. This should put an end to complaints related to readings, he said.

Hamza also told Al-Ahram Weekly that the ministry was keen to improve its services in terms of coverage and stability by investing in transmission and distribution networks at a total cost of LE42 billion. Some parts of the electricity network have suffered from breakdowns and failures, especially in some areas in Upper Egypt, causing power outages, he said.

He added that Egypt was actively involved in electricity interconnection projects, as these could help maintain the continuity of supply. One such interconnection was with Jordan, he said, and a feasibility study to increase its capacity from the current 450 MW to 2,000-3,000 MW was being looked into.

In addition, there are plans to link Egypt with Cyprus and Greece, allowing the country to serve as a central hub for electricity among three continents. Currently, the feasibility study of the project was being reviewed by the ministry, Hamza said.

Egypt is also set to finalise an interconnection with Sudan with an initial capacity of 100 MW and plans to increase capacity to 200-300 MW. The 100km interconnection starts at the Toshka 2 transformer station in Egypt and leads to the 220 KV transformer station in Aqin in Sudan.

Egypt is also planning an electricity interconnection with Saudi Arabia that will have a capacity of 2,000-3,000 MW/DC on 500 KV. 

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