CAIRO: Minister of Electricity and Energy Hassan Younes announced the procurement of $5 billion in funds to “boost energy output in Egypt. The funds come from “international and regional financers , according to the MENA state news agency, although the minister did not identify the funders.
Over the next 17years, Egypt hopes to attract total investments of $110 billion for its energy sector, as it implements measures to enhance electrical infrastructure. A primary goal of the current 2007-2012 five-year plan is to add 9.200 megawatts to national electrical capacity, in addition to new transformer stations and extended power lines, according to MENA.
It is expected that total investments in this plan will arrive at about LE 80 billion ($14.54 billion) … without incurring any financial burden on the state , Younes said.
Egypt’s energy sector has attracted attention as policy makers have allegedly committed to alternative energy. In April of 2008, the Supreme Council for Energy pledged that 20 percent of Egypt’s electricity will come from renewable sources by 2020. Over half of this, 12 percent or about 7000 mega watts (MW), will come from wind energy.
The pledge received international attention from both investors and environmentalists; the latest influx of cash, however, carries no earmark for “alternative .
Aktham Abou El-Ella, Under Secretary to the Minister of Electricity and Energy, told Daily News Egypt that the government needs to meet its basic obligation of providing electricity for citizens before going after more ambitious alternative projects.
He clarified that not all of the $5 billion will go to traditional (petroleum-based) electricity. $100 million will go to finance the grid-connected wind farms currently being developed.
He also pointed out that the figure of $5 billion is the aggregation of the past two years fund-raising efforts by the ministry to attract investors for the current five year period ending in 2012. Abou El-Ella specified that both European and Arab banks were responsible for the funds.
“The funds will be distributed to electrical infrastructure all over the country, they are not intended for one specific area or region, stated Abou El-Ella.
“The funds will be used to construct power plants, traditional power plants, he affirmed, then outlined plans for 140 MW of alternative energy, 120 of which will come from thermal power plants and 20 of which from solar.
He reaffirmed the ministry’s commitment to wind energy: “We have currently have capacity for 430 MW of wind-generated electricity, and are developing the infrastructure to make use of 420 MW of that total.
He did not reference the 7000 MW figure quoted by his ministry in previous statements.
Egypt has prime conditions for alternative energy generation, whether wind, solar, hydroelectric or thermal, according to numerous studies commissioned by the government in preparation for the Electricity Bill. However, with citizens still experiencing power shortages and an aging electrical infrastructure, and with demand growing by 8 percent a year, according to Abou El-Ella, putting money in cheaper traditional energy sources makes too much sense for the short term to consider the long term implications.
