Corruption threatens Egypt's energy plans: new report

Ahram Online, Saturday 30 Apr 2011

Bribes and bureaucracy may be discouraging crucial foreign investment in Egypt's renewable sector, says Transparency International

Tilting at windmills? A lack of transparency makes investors think twice (Photo: Reuters)

Endemic corruption could stall Egypt's plans for developing renewable energy, says a new study from Transparency International (TI).

The corruption watchdog released a report on Saturday entitled 'Global Corruption: Climate Change', calling for stronger oversight in countries most affected by climate change.

A section on solar and wind energy in North Africa notes graft practices may be discouraging the private investment needed to develop facilities in Egypt, Morocco and Tunisia.

"[Foreign] investment often does not occur because of complex and lengthy bureaucratic procedures and uncertainty as to whether public officials will expect bribes," says the chapter, authored by Nadejda Komendantova and Anthony Patt.

A 2008 World Bank enterprise survey claimed 45 per cent of companies involved in foreign direct investment in Egypt found corruption to be a major constraint.

"A failure to address corruption will result in higher quantities of investment being required for CSP [Concentrated Solar Power] deployment in North Africa... Another [result] is that investors will simply seek other regions for investment," the chapter concludes.

Egypt's Mubarak-era government committed itself to attaining 20 per cent of its energy from renewable sources by 2020 and stated it was looking to attract $110 billion of investment to the energy sector by 2027.

The European Union (EU) has also pledged renewable usage of 20 per cent by 2020. Much of the EU's supply is expected to come from solar and offshore wind installations in North Africa.

Saturday's report from Transparency International ranked nations according to corruption risk, where 0 is extremely corrupt and 10 is "very clean". Egypt clocked in at 3.1, while none of the 20 countries most affected by climate change, mainly in Africa and South Asia, scored higher than 3.5.

Rising sea levels mean Egypt's Nile Delta region is now regarded as being at "high risk" while the remainer of the country is said to be at "medium to low risk" from environmental change.

Officials have previously claimed rising sea levels could see 6 to 8 million Egyptians displaced and half the nation's crops submerged.

Southern neighbour Sudan tops the list of threatened countries, with TI citing "extreme risk" from "hydro-meteorological disasters and [problems with] water/food security".

An October 2010 report from Transparency International on perceived levels of worldwide corruption placed Egypt 98th on a list of 178 countries. Denmark -- regarded as least corrupt -- was in 1st place.

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