Newly released market study: Egypt Power Report Q2 2016
Fast Market Research recommends "Egypt Power Report Q2 2016" from Business Monitor International, now available
[USPRwire, Tue Mar 29 2016] The demand for power in Egypt will increase in the medium- and long term. We forecast total electricity generation will grow 4.46% in 2016 as the government brings gas and coal capacity online to overcome chronic power shortages. Egypt expects to add 2,500-3,000MW of power generation capacity in 2016, in a bid to resolve the power shortage that has hampered the country's heavy industry in the last few years, Egypt has added 6,882MW of additional capacity to the grid since the beginning of 2015 and it is speeding up existing projects to boost power generation capacity, with the aim of avoiding disruption to factories.
Egypt's power sector is enduring an exceptionally challenging period. Persistently high demand for energy, driven in part by the country's generous regime of energy subsidies, has weighed heavily on Egypt's ageing electricity infrastructure, which has struggled to keep pace with a growing need for energy.
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With economic growth hinging on the provision of adequate and reliable power to vital sectors (ranging from industry and agriculture to tourism and transport), the expansion of Egypt's electricity infrastructure has long been a key priority for the government. An ambitious power sector investment programme was implemented over two phases from 2002-2012, adding 18,850MW of new capacity. However, with persistent power shortages continuing to blight the sector, the issue has gained even more prominence since the beginning of 2015, forcing the government to take urgent action. In May 2015 the government declared a 'state of emergency' to prepare for the surge in demand that generally accompanies the summer heat, and launched the first phase of a plan to urgently upgrade the country's generating capacity.
In some respects, the sector's problems have created an opportunity for the government to prioritise badly needed investment and push ahead with necessary reforms. In February 2015 the cabinet approved a law privatising electricity production, distribution and transmission. The law aims to move the state towards a regulatory role and away from directly managing the electricity sector. The law will introduce rules to allow free competition in the production, transfer, distribution and sale of electricity, and will separate the transport, production and distribution of electricity. The most significant change in the new law is that transmission and sales will be opened to the private sector, creating attractive terms for investments in the power sector. The government has also begun reducing subsides, raising electricity prices for households, with mid-high usage by an average of 19% for the 2015-2016 fiscal year. This is part of a five year plan which began in the last fiscal year.
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