Mohamed Shaker
Minister of Electricity and Renewable Resources
Energy / Egypt
From crisis to recovery
Just two years ago, Egypt was plagued by constant and debilitating blackouts. But following a massive upgrade of power supply conducted in conjunction with Siemens, the country’s grid has established the capacity needed to handle its rapidly growing population. Gulf investors have moved in, as well, to invest in coal-fired plants, and there are plans to derive 20 per cent of the country’s energy mix from renewable resources by 2030. We ask Dr Mohamed Shaker, Minister of the Ministry of Electricity and Renewable Energy, to explain more.
How has electricity supply improved in Egypt?
In 2014, Egypt was suffering from blackouts that lasted two to four hours each day; it was the worst energy crisis we’d seen in decades. Yet, today Egypt’s electricity capabilities have recovered, and there is not a single power cut due to a lack of supply. This was largely due to a partnership with Siemens to jointly install 40,400MW to the grid, which was, at the time, almost 50 per cent of the total load during peak hour. The deal was completed in two and a half years, worth about $6.5 billion and one of the largest infrastructure upgrade projects in the region.
If supply capability has recovered, then what is the main challenge to maintain the grid?
There could be some challenges developing the transformer network, because Egypt’s power transformers are fully owned by the government and no private investment is allowed in this area. However, we have put forth very serious plans to improve the structure of our power grid, and allow for power generation and distribution to be owned and developed by private entities.
How is the state-owned power transformer network being strengthened?
The ministry is now focused on developing the quality of our power output alongside private sector investors. A Chinese company, the China Electric Power Equipment and Technology Co., signed a deal in January to build 1,210 kilometers of transmission lines with a capacity of 500 kilowatts. In parallel, we will be changing over 150 high-voltage transformers to larger sizes in order to improve voltage levels.
How do Gulf investors participate in Egypt’s electricity sector?
Gulf investors mostly come to Egypt to build coal-fired power stations, including entities from the UAE and Saudi Arabia. They do this under our build, own and operate (BOO) scheme, which is very competitive. The average coal-powered station costs between $3 and $4 billion, requires intensive technical collaboration, and is seen as a solid investment given that Egypt’s electricity demand is projected to continue growing about 7.5 per cent for the next five years.
