Energy – Daily News Egypt https://dailynewsegypt.com Egypt’s Only Daily Independent Newspaper In English Fri, 23 Jun 2017 13:32:56 +0000 en-US hourly 1 Egypt’s energy future between reality and fantasies https://dailynewsegypt.com/2017/06/06/egypts-energy-future-reality-fantasies/ https://dailynewsegypt.com/2017/06/06/egypts-energy-future-reality-fantasies/#comments Tue, 06 Jun 2017 08:10:16 +0000 http://dailynewsegypt.com/?p=628006 Egypt is the second largest producer of natural gas in Africa after Algeria, yet Egypt’s power generation infrastructure is dependent on natural gas. More than 75% of the electricity generated in Egypt comes from natural gas plants. Egypt currently produces about 3.9bn cubic feet of gas per day and imports another 1-1.1bn cubic feet per …

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Egypt is the second largest producer of natural gas in Africa after Algeria, yet Egypt’s power generation infrastructure is dependent on natural gas. More than 75% of the electricity generated in Egypt comes from natural gas plants. Egypt currently produces about 3.9bn cubic feet of gas per day and imports another 1-1.1bn cubic feet per day with an estimated cost of $300mn per month, in order to meet the growing needs of the electricity sector.

The country does have multiple areas of undeveloped reserves, which had not been able to afford their development, as the Egyptian government  had not offered high enough prices to foreign firms capable of developing the reserves. That changed lately with the new Mediterranean discoveries.

Egyptian consumption of natural gas has been increasing by approximately 7% per year over the past decade. The increasing level of consumption combined with the decreasing level of production meant that Egypt was only able to export 5% of its total natural gas production in 2013.

Egypt’s Energy challenges

Although Egypt is a hydrocarbon rich country, it faces numerous energy challenges. Ensuring reliable, affordable, and sustainable energy is still a major challenge for the Egyptian state, especially after the country’s shift in recent years from being an exporter of natural gas to an importer.

Egypt’s gas exports to Jordan and Israel began in 2003, soon after which it began exporting gas through two liquefied natural gas (LNG) facilities to different markets. By fiscal year (FY) 2007/2008, Egypt’s earning from gas exports reached $3.2bn.

In the period between 1995 and 2010, Egypt’s proven reserves more than tripled from 22.8tn cubic feet (TCF) to 78 TCF. Since 2010, the remaining reserves have declined, until the recent exploration of Zohr field, which has an estimated reserve of 30 TCF.

Egypt’s natural gas supply comes from 4 main geographical locations: Western desert (onshore), Nile delta (onshore), Gulf of Suez (offshore), and Mediterranean Sea (offshore).

Before the 2011 revolution, Egypt’s natural gas production was on the rise, increasing by around 6.3% annually between 2005-11 to reach 61.4bn cubic meters (5.9bcf/d) in 2011. This growth was supported by new discoveries, which raised reserves to 2.2tn cubic meters(77.7tcf) in 2011 up from c1.9tn cubic meters (67.1tcf) in 2005. Additionally, new developments and drilling of existing fields, raised the production to reserve ratio to 2.8% in 2011 up from 2.2% in 2005.

Egypt’s supply and demand balance followed a similar path. The production rate started to increase in 1999. While 2004 marked only a slight increase in production, it was the first time in years where the amount of produced gas was greater than the amount of consumed gas. This triggered a turning point in 2005, as production increased by around 28% compared to 2004, and peaked in 2009, followed by a drop in 2013.

On the other hand, energy consumption increased in the first decade of the 21st century, and gas demand grew by almost 9%. Gas became the main source for Egypt’s energy needs, reaching 50% of the total energy supply, compared to 35% in 2000.

However, since 2011, production and reserves have been on a consistent downtrend. This was driven by International Oil Companies (IOCs) reducing exploration capital expenditures (capex) following the Petroleum Ministry’s inability to settle its dues, which meant that natural depletion of resources was not being offset. Government dues to IOCs peaked at USD6.4bn in FY11/12, rising from  $1.3bn in FY2009/10, as FX reserves dwindled.

However, the government repaid $3bn of dues over 2012-16 period, bringing it to USD3.5bn as of December 2016. In March, the government promised to pay 50% of IOCs dues within weeks, but there has been no update since then, CI capital forecast that full repayment will take place after receiving the second tranche of the International Monetary Fund (IMF) loan in June.

Consequently, Egypt’s natural gas reserves fell to 1.8tn cubic meters (63.5tcf) in 2015, down from 2.2tn cubic meters (77.7tcf) in 2011, while gas production fell to 45.6bn cubic meters  (4.4bcf/d) in 2015, down from 61.4 cubic meters  (5.9cf/d) in 2011, reflecting a production to reserve ratio of 2.5% in 2015 vs. 2.8% in 2011.

The demand for natural gas is expected to grow, especially after Siemens signed an €8bn deal with the Egyptian government to establish three high-efficiency natural gas power plants at a capacity of 14.4GW. Regarding the residential sector, Egypt has secured a $1.5bn project to connect 1.5 million households to natural gas.

Despite Egypt terminating a host of export deals to redirect gas supply to the domestic market, the gas shortage became acute enough to trigger nationwide power outages and shut-downs in a number of energy-intensive industries.

Egypt’s Ministry of Petroleum forecasts a drop of gas production by 3.6% to 4.85 billion cubic feet per day (bcf/day) in FY 2017/2018, compared to 5.03 bcf/day in FY 2014/2015. This is expected to lead to curtailed production at factories. The Egyptian Natural Gas Holding Company (EGAS) announced in June that the natural gas supplied will be diverted away from industrial plants in August to accommodate for the increased demand from the electric power plants.

The shortage was partially resolved in April 2015, when Egypt resorted to natural gas imports to fill the gap via Liquefied Natural Gas (LNG) and Floating Storage and Regasification Units (FSRUs) installed in April 2015  and September 2015. We estimate Egypt’s natural gas imports to have reached 8.0bn cubic meters (0.8bcf/d) in 2016 and 8.4bn cubic meters (0.8bcf/d) in 2017. Which makes up around 18.6% of domestic gas needs according to CI Capital estimates, but they believe the supply gap is actually higher (at 27.5% of domestic demand) if high heavy fuel oil usage at power plants is replaced with gas. Plans to install a third Floating Storage Regasification Unit (FSRU) were put on hold in December16, in anticipation of improved supply from the new fields, starting 2017.

However after the discovery of Zohr gas field-the largest gas field in the Mediterranean Sea-, which EGAS aims that it will produce 900mn cubic feet of gas per day by the end of 2017 , and is estimated to produce 2.7bn cubic feet per day by 2020. will help to serve the Egyptian domestic market demands.

As new gas fields come on stream starting 4Q17, we expect Egypt’s natural gas production to increase to c82bn m 3 (7.9bcf/d) in 2020, up from 48.3bn m 3 (4.7bcf/d) in 2016. The largest contribution comes from Zohr Field, which alone, should add 28bn cubic meters (2.7bcf/d) at peak production in 2020. Which will compromise around  34.5% of total gas production in 2020, based on CI Capital’s industry model.

Demand outlook

According to CI Capital “Egypt’s Natural gas outlook”, natural gas demand is expected to considerably increase while new field production picks up—with an annual growth rate of 9.4% over the period from 2016 to 2020 to reach 81bn cubic metres (7.8bcf/d). The main driver for this growth is power demand.

CI Capital estimates Egypt’s natural gas imports at 8.4bn cubic metres (0.8bcf/d) in 2017, which will represent around 13.3% of total gas demand, as well as 16% of total annual peak production from the new gas fields. The cost of these imports is $2bn, comprising around 3.6% of Egypt’s total import bill in FY16/17. 2018 is the first full year of production from the largest finds— from the Zohr field and the West Nile Delta project—and  natural gas imports are forecast to fall by 35.4% to reach 5.4bn cubic metres (0.5bcf/d).

As the result of the currency devaluation and economic reform efforts start to bear fruit in mid to late 2017, natural gas needs should increase heavily. According to CI Capital’s report. Egypt’s real GDP is expected to grow by 5%. in FY17/18 and FY18/19, and 4% in FY19/20.

It forecasts that recovering economic growth alongside population growth should drive power consumption to grow at a 6.9% annual growth rate to 265TWh from 2016 to 2021, while residential and industrial gas demand is forecast to grow at an annual rate of 4.8% to 32.7bn cubic metres (3.2bcf/d) over the same period.

Collectively, this should boost domestic gas demand by 17bn cubic metres (1.6bcf/d) during the aforementioned timeframe if other factors remain constant and no changes are applied to the fuel mix at thermal power plants. Historically, power generation accounted for 52% of demand, while residential and industrial demand collectively accounted for the remaining 48% between 2005 and 2016.

Fantasies &Realities 

Many hope that the new gas field outputs can establish self-sufficiency and drive gas exports. However, after assessing Egypt’s natural gas market CI Capital expects that Egypt will remain a net gas importer in the foreseeable future, despite output from mega fields picking up in 2017/18, adding 53bn cubic metres (5.1bcf/d) at peak, making up around 116% of 2015 production.

Incremental supply has started to hit the market and imports are exported to decrease to reach 7.6% and 0.9% over 2018-19, respectively, of local market needs down from 13.3% in 2017. But this is still a major shift from when Eni’s mega Zohr field was announced in 2015 and there were hopes for exports. On the upside, the higher domestic supply will mean gas imports will contribute 1.6% of the trade deficit by 2020 down from 11% in the current fiscal year.

CI Capital’s report concludes that there will be no room for exports due to various reasons, such as a high increase in local demand of 5.3% from 2016 to 2021, and the fact that the heavy fuel oil (HFO) use in power plants rose due to the gas undersupply to 25% of fuel consumed for electricity generation in FY15/16 from 15.3% in FY11/12 and is likely to be substituted for improved generation efficiency and cost saving.  Suboptimal exploration means that new field output has to compensate the dwindling output from existing gas fields. As Egypt pays late dues to IOCs ($3.5bn in Dec 2016), exploration capex should be reinstated and this may mean improved supply, but not over 2017-19.

According the report, major gas field discoveries—adding 53bn cubic meters at peak—will reduce import needs, from 13.3% of domestic demand this year, down to 7.6% and 0.9%, in 2018 and 2019, respectively.

However, the report concludes that Egypt is unlikely to export in the foreseeable future or achieve self-sufficiency, as domestic demand has grown substantially since major new fields were announced. Production from existing fields depleted at a 2011-15 annual growth rates of 7.1% on the back of suboptimal exploration activity.

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Vortex acquires TerraForm’s 365 MW UK solar portfolio https://dailynewsegypt.com/2017/05/11/vortex-acquires-terraforms-365-mw-uk-solar-portfolio/ https://dailynewsegypt.com/2017/05/11/vortex-acquires-terraforms-365-mw-uk-solar-portfolio/#respond Thu, 11 May 2017 14:31:43 +0000 http://www.dailynewsegypt.com/?p=625111 The transaction makes Vortex one of the largest renewable energy-focused investment vehicles in Europe

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EFG Hermes announced today that Vortex, the European renewable energy platform managed by its private equity division, reached financial closure today on its 100% acquisition of a 365 MW portfolio of 24 operational solar assets in the United Kingdom from TerraForm Power.
The transaction marks Vortex’s first investment in the solar energy sector and increases Vortex’s total net operational capacity to 822 MW.
Karim Moussa, head of asset management and private equity at EFG Hermes, said that in well under four years, Vortex evolved rapidly to become one of the largest renewable energy-focused investment vehicles in Europe with a wide range of solar and wind assets spreading across six countries in Europe, generating more than 1,500 GWh of renewable energy, which is enough to power more than 350,000 households each year.
“Vortex’s success to date underpins our transformation from being a manager of investments across MENA to being an investment manager that caters to our client’s specific needs in our region and beyond. Vortex will continue to target wind and solar acquisitions in Europe with a target of owning a total of more than 2 GW in generation capacity within three years,” Moussa added.
Vortex signed the £470m transaction in January. The equity share capital of the transaction was funded through a 50% subscription from Tenaga Nasional Berhad (TNB), one of the largest utility players in Asia with a market capitalisation of $18bn and a power generation capacity of 13 GW. The remaining 50% of the equity ticket was underwritten by EFG Hermes, consistent with the merchant banking model that it announced last year.
Accordingly, Vortex plans to sell 45% of the equity share capital of the transaction in the near future, retaining a 5% stake in line with its previous transaction structures. Vortex is also in the process of refinancing the portfolio’s existing debt facilities.
Since its launch in late 2014, Vortex has successfully invested more than €1.3bn in the European renewables market. The UK solar portfolio joins an existing 457 MW portfolio of operating onshore wind assets operated by EDP Renováveis SA across four Western European countries.

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Egypt to receive Iraqi oil next week https://dailynewsegypt.com/2017/05/10/egypt-receive-iraqi-oil-next-week/ https://dailynewsegypt.com/2017/05/10/egypt-receive-iraqi-oil-next-week/#respond Wed, 10 May 2017 17:28:36 +0000 http://www.dailynewsegypt.com/?p=625021 First shipment will be 2 million barrels, according to Ezz El Regal

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Egypt is set to receive the first shipment of 2 million barrels of Iraqi oil next week.

Head of the Egyptian General Petroleum Corporation (EGPC), Abed Ezz El Regal, said that the barrels have been loaded onto the ship and mobilised from the port of Basra en route to an Egyptian port and are set to arrive on Saturday.

He told Daily News Egypt that the shipments will be received according to a timetable every month, where 12 million barrels will be received this year. Payment for the shipments will be facilitated.

He explained that the Egyptian-Iraqi agreement for the import of oil was not a substitute for shipments from Saudi Aramco, noting that the government agreement provides a grace period up to 90 days before payment of dues.

Ezz El Regal stressed that Saudi Aramco shipments are being received regularly according to the contracts.

Saudi Aramco announced in mid-March that it was resuming the supply of its oil shipments of 700,000 tonnes per month to Egypt, following a five-month suspension, which forced Egypt to look for other alternatives and sign the agreement with Iraq.

Saudi Aramco signed an agreement with EGPC to supply petroleum products for five years, funded by the Saudi Development Fund, as part of a package of agreements signed between Egypt and Saudi Arabia in March 2016, worth $25bn in total, according to remarks by Minister of International Cooperation Sahar Nasr.

The agreement states that Egypt buys from Aramco 400,000 tonnes of gas oil (diesel), 200,000 tonnes of gasoline, and 100,000 tonnes of fuel oil on a line of credit at an interest rate of 2% to be repaid in 15 years.

The cabinet had approved the agreement of importing 12 million barrels of oil from Iraq, which will be divided into 1 million barrels per month. The oil will be refined in Egyptian refineries and injected into the domestic market.

The Ministry of Petroleum renewed two commercial contracts for the supply of petroleum products and crude oil, with KPC, for three years, in quantities of up to 1.5 million tonnes per year of petroleum products, and 2 million barrels of crude oil per month.

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5 companies granted temporary licences to produce solar energy https://dailynewsegypt.com/2017/05/08/5-companies-granted-temporary-licences-produce-solar-energy/ https://dailynewsegypt.com/2017/05/08/5-companies-granted-temporary-licences-produce-solar-energy/#respond Mon, 08 May 2017 11:32:06 +0000 http://www.dailynewsegypt.com/?p=624724 The flotation of the pound increased the price of licences

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The Egyptian Electric Utility and Consumer Protection Regulatory Agency approved granting temporary licences for producing solar energy according to the feed-in tariff system.

Sources at the agency said that the meeting of the facility’s board of directors approved granting five companies the provisional licence, in addition to granting Infinity Solar Systems a permanent licence to produce electricity for 25 years.

The agency has agreed to grant licences to companies after meeting the terms and conditions that regulate its delivery next month. It will include practising the activity for 12 months.

The final licence will be available after completion of the financial closure of the projects.

The sources added that the prices of the licensing study were adjusted after the flotation of the pound. Each company must pay EGP 10,000 to obtain the licence.

The models and documents of the companies that signed the energy purchase agreement will also be reviewed in the second phase of the feed-in tariff project, including Scatec Solar, Philadelphia Solar, IT Investment, Sun Infinite Energy, and TPK, with a capacity of 50MW per company and a total capacity of 300MW.

The sources stressed upon the interest of investors and international companies in setting up renewable energy projects in Egypt, especially with the clarity of the government’s vision of granting incentives to these companies. In addition, the cost of producing solar energy is reduced because of the availability of distinctive sites and the heat of the sun.

In 2014, the government launched the renewable energy feed-in tariff system to set up wind and solar power plants with investments of $7bn, including 2,300MW for solar projects, 300MW for plants with less than 500KW, and 2,000MW for wind plants.

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Egypt obliged to pay $2bn in compensation to Israel for halting gas exports https://dailynewsegypt.com/2017/04/30/egypt-obliged-pay-2bn-compensation-israel-halting-gas-exports/ https://dailynewsegypt.com/2017/04/30/egypt-obliged-pay-2bn-compensation-israel-halting-gas-exports/#respond Sun, 30 Apr 2017 11:15:10 +0000 http://www.dailynewsegypt.com/?p=623722 Israel put pressure on Egypt to ease conditions for importing gas from its fields, says former Petroleum Minister

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A Swiss court issued a ruling obliging Egypt to pay a compensation of $2bn to Ampal-American Israel Corporation for the damage caused by the cessation of the export of natural gas from Egypt to Israel in 2012.

Government sources revealed Egypt’s intention to negotiate in order to reach a solution after the Swiss court rejected the appeal filed by the government, noting that the situation will be comprehensively studied before making any decisions.

The Israeli newspaper Haaretz quoted a source close to the jury as saying that the Egyptian government did not pay the compensatory amounts imposed by international courts recently, and if Egypt did not pay, it will impact the future of foreign investments and lower Egypt’s credit rating.

Former Petroleum Minister Osama Kamal said that refusing the appeal is merely an attempt to put pressure on the Egyptian side to ease conditions in terms of allowing foreign companies to import gas from Israel, where Egypt is the only outlet for it.

He pointed out that the decision to stop exporting gas to Israel was correct, even if Egypt paid the compensation. He noted that the $2bn is equivalent to the gap in exporting gas for less than a year if Egypt continued exporting gas at this low price.

The court said that the Egyptian General Petroleum Corporation (EGPC) and Egypt Gas are responsible for the attacks on the gas pipeline, which passes through the Sinai desert to Israel, according to the Israeli Electricity Company.

The two Egyptian companies had appealed the previous ruling issued in December 2015, which was also in favour of the Eastern Mediterranean Gas Company and with a compensation of $2bn. The company was owned by Egyptian businessman Hussein Salem and the Israeli Electricity Company.

Although Egypt challenged the ruling of the International Chamber of Commerce, the verdict this time cannot be challenged. Despite the ruling this month and the previous one in 2015, Egypt is facing two more cases before international arbitration regarding the issue of exporting gas to Israel—one in front of the United Nations Commission on International Trade Law (UNCITRAL), filed by Maiman, representing the Israeli Merhav Company, and the other pending before the Cairo Regional Centre for International Commercial Arbitration (CRCICA).

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Aman and Petrotrade cooperate to collect gas bills electronically https://dailynewsegypt.com/2017/03/30/aman-petrotrade-cooperate-collect-gas-bills-electronically/ https://dailynewsegypt.com/2017/03/30/aman-petrotrade-cooperate-collect-gas-bills-electronically/#respond Thu, 30 Mar 2017 11:26:46 +0000 http://www.dailynewsegypt.com/?p=620405 Petrotrade clients can now pay their bills through Aman outlets anywhere in Egypt, says Wahby

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Aman for e-payment solutions signed an agreement with Petrotrade for Petroleum Trading Services on Tuesday. The agreement gives Aman the right to electronically collect the value of gas bills from clients.

The signing ceremony was attended by CEO of Aman Mohamed Wahby and by the chairperson of Petrotrade, as well as a number of officials at Petrotrade and Aman.

Wahby said that the contract is a first step to provide unprecedented services through the electronic collection of bills. He noted that all Petrotrade clients can now pay their bills through Aman outlets anywhere in Egypt.

He pointed out that the company is working hard in signing more contracts with other government agencies and private sector companies.

Meanwhile, Petrotrade’s chairperson said that the company agreed to sign the contract with Aman for the successful projects it has managed before, next to its expertise in Egypt.

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Commercial operation of Siemens power plants to begin next week https://dailynewsegypt.com/2017/03/23/619634/ https://dailynewsegypt.com/2017/03/23/619634/#respond Thu, 23 Mar 2017 19:12:52 +0000 http://www.dailynewsegypt.com/?p=619634 Siemens will add 1,200MW to the electricity grid from the Beni Suef power plant, and 800MW from New Administrative Capital and Borollos power plants

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Siemens is set to begin the commercial operation of five units in the Borollos, Beni Suef, and New Administrative Capital power plants with a capacity of 2,000MW by next week.

Ibrahim Al-Shahat, head of Upper Egypt Electricity Production Company, said that the company will start the commercial operation of three units at the Beni Suef power plant with a capacity of 400MW each by next week.

He added that Siemens has started the commercial operation of a production unit with a 400MW capacity at the Beni Suef power plant on Saturday, in cooperation with the engineers of the Upper Egypt Electricity Production Company.

He further added that all capacities will be added to the electricity grid after its commercial operation, and the National Energy Control Center will decide whether to use all, half, or part of the electricity.

An official source at the Ministry of Electricity said that the commercial operation of five electricity production units will be started at Siemens’ three power plants in Beni Suef, Borollos, and the New Administrative Capital, with a total capacity of 2,000MW, including three units in Beni Suef with a capacity of 120 MW, and 800MW from the New Administrative Capital and Borollos power plants.

He added that all the invoices, submitted by Siemens for the officials of the Egyptian Electricity Holding Company (EEHC), have been approved, asserting that they will not delay the payment of their dues, so that the company can complete the work in the three power plants according to the time table.

The EEHC had signed contracts with Siemens last year to implement the three combined-cycle power plants with a total capacity of 14,400MW.

Siemens is implementing the three projects through the EBC+Finance scheme, while the EEHC will repay the loan over several years.

Three German banks, KfW Development Bank, HSBC, and Deutsche Bank secured funding for Siemens’ projects in Egypt, amounting to €4.1bn of a total contract value of €6bn. Arab banks secured the remaining funding in Egyptian pounds to pay for the Egyptian companies participating in constructions, including Elsewedy Electric and Orascom.

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Egypt exchanges 770MW of electricity with Jordan and Libya https://dailynewsegypt.com/2017/03/23/egypt-exchanges-770mw-electricity-jordan-libya/ https://dailynewsegypt.com/2017/03/23/egypt-exchanges-770mw-electricity-jordan-libya/#respond Thu, 23 Mar 2017 18:52:07 +0000 http://www.dailynewsegypt.com/?p=619632 Ministry of Electricity aims to increase the electricity connection with a number of neighboring countries to about 2,000MW by next year

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According to sources at the Ministry of Electricity, the total electricity capacity exchanged with Jordan and Libya is estimated at 770MW, adding that there is no electricity link with Syria, Iraq, or Palestine.

The sources added that the capacity of the Egypt-Jordan electricity link has been increased to 550MW, especially after securing all local consumers’ needs. The Egypt-Libya link rated at 220MW, using 200KV, and is expected to increase within two months.

The sources explained that the value of energy is calculated based on the foreign currency rate at the time of exchange and the price of used fuel.

The relations between Egypt and Jordan are witnessing a positive development and remarkable progress in all fields, especially in the field of electricity. It is planned to strengthen the electrical networks and increase their production capabilities within the framework of the comprehensive electrical connection.

Egypt aims to cooperate with Jordan in establishing new and renewable energy projects, and manufacture equipment for electricity projects.

According to the sources, the Ministry of Electricity aims to increase the electricity connection with a number of neighboring countries to about 2,000MW by next year, especially after achieving a surplus in production and securing all consumers’ needs.

The Ministry of Electricity and Renewable Energy had announced that the Egyptian Electricity Transmission Company signed a contract for the exchange of electric power in 2015 with the Jordanian national electricity company. The move comes within the context of the two countries’ keenness to boost bilateral cooperation in the field of electricity and make the necessary repairs to the national electrical grids in the two countries by pumping more investments.

Jordan is one of the pioneering countries in the restructuring of the electricity sector, as it established a regulatory body for the sector, in addition to its participation in regional future projects, such as the electricity link among the Mediterranean counties. It also established an open market for electricity and participated in the hexa-link electricity project, which includes Jordan, Egypt, Iraq, Lebanon, Syria, and Turkey.

On the other hand, the sources said that the trial operation of the Egyptian-Saudi electricity link project is expected to start in 2019. The project aims to exchange electricity with a capacity of about 3,000MW at peak time.

The Saudi side is currently reviewing the technical studies submitted by the companies applying for the tender of the implementation of the electricity linking lines.

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Military Production Ministry to cooperate with Samsung to manufacture solar panels https://dailynewsegypt.com/2017/03/23/619602/ https://dailynewsegypt.com/2017/03/23/619602/#comments Thu, 23 Mar 2017 12:57:59 +0000 http://www.dailynewsegypt.com/?p=619602 The agreement aims to establish a solar panel factory at Benha with an annual capacity of 200MW

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Magdy Mohamadein, chairperson of Benha Electronics, which is affiliated to the Ministry of Military Production, signed a cooperation protocol with S-Energy Company, a spin-off from Samsung Electronics, which is one of the most experienced solar panel makers. The agreement aims to establish a solar panel factory at Benha with an annual capacity of 200MW.

According to Mohamadein, this agreement aims to transfer the South Korean company’s experience in the manufacture of solar panels to Benha, so as to enhance the company’s manufacturing capabilities and benefit from S-Energy’s technological expertise in this field.

He added that the agreement aims to optimize the available solar energy in Egypt throughout the year to generate electricity for various uses in houses, industry, and commerce.

He pointed out that this field will help Egypt to export its electricity production to neighboring Arab and African countries.

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Government considers applying new electricity tariff in July https://dailynewsegypt.com/2017/03/16/government-considers-applying-new-electricity-tariff-july/ https://dailynewsegypt.com/2017/03/16/government-considers-applying-new-electricity-tariff-july/#respond Thu, 16 Mar 2017 16:02:24 +0000 http://www.dailynewsegypt.com/?p=618804 Action takes into consideration low-income citizens, sources at the Ministry of Electricity say

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A committee formed by the Egyptian Electricity Holding Company (EEHC) is studying the suggestions presented to increase electricity tariffs in the fiscal year (FY) 2017/2018, according to the prices reconstruction programme announced in 2014.

Sources at the Ministry of Electricity told Daily News Egypt that the committee decided to extend the period to remove electricity subsidies, which was planned to take place in 2019, and rather increase the prices of electricity across all consumption segments.

The sources noted that the increase of the tariffs will take into consideration the less-consuming segments low-income citizens. They added that the proposal includes raising the prices of household consumption that are up to 200 kW/h by 10-25%.

The suggestion also includes raising prices by 30-40% on higher consuming clients, with the potential of reaching 60%.

Furthermore, the sources said that the production cost of electricity in FY 2017/2018 will increase, especially as the tariff in 2016/2017 was based on an exchange rate of EGP 8.88 to the dollar, while the exchange rate has now hiked to EGP 18.

As a result, the cost of producing one unit of electricity surged to EGP 0.95 per kW/h, up from EGP 0.637 in the current fiscal year. The original price-restructuring programme included a cost of 47.5 piastres.

The sources said that it will be unlikely to postpone the increase, as the ministry will not be able to secure its financial needs to expand and establish more factories under the current prices, even though electricity is subsidised by EGP 63bn.

The government’s scheme in 2014 includes gradually removing electricity subsidies over a course of five years, to be fully unsubsidised by 2019.

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4,000-MW surplus before inaugurating Siemens power plants https://dailynewsegypt.com/2017/03/02/617003/ https://dailynewsegypt.com/2017/03/02/617003/#respond Thu, 02 Mar 2017 14:38:13 +0000 http://www.dailynewsegypt.com/?p=617003 Siemens' power plants are linked to the national grid but are not commercially operational

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A source at the National Energy Control Center (NECC) revealed on Thursday that there was a surplus in electricity of 4,000 MW. The source added that this surplus will not increase after the inauguration of the first phase of the Siemens power plants in Beni Suef, the New Administrative Capital, and Burollus.

He told Daily News Egypt that Siemens’ power plants were linked to the national grid but are not commercially operating now.

He explained that the increase in electricity production is due to the completion of maintenance done on existing stations to improve their efficiency, next to 1,580 MW coming from the electricity urgent plan.

The source noted that the Ministry of Electricity and Renewable Energy has completed the maintenance of production plants of 27,000 MW for next summer.

He added that the ministry said that the Egyptian Electricity Holding Company (EEHC) completed 80% of the annual maintenance of production units at the national level to cope with the loads expected in the summer, where the remaining units will be undergoing maintenance until April.

He pointed out that EEHC began the final phase of the maintenance of production units with total capacities of 3,000 MW, including plants in Nubaria, Kuraymat, El-Atf, Sidi Kerir, Mahmudiya, Abu Qir, Karmouz, and Walideya.

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EEHC contracts with Tractebel to evaluate offers on Hamrawein plant https://dailynewsegypt.com/2017/03/02/eehc-contracts-tractebel-evaluate-offers-hamrawein-plant/ https://dailynewsegypt.com/2017/03/02/eehc-contracts-tractebel-evaluate-offers-hamrawein-plant/#respond Thu, 02 Mar 2017 09:21:22 +0000 http://www.dailynewsegypt.com/?p=616965 The Belgian consultancy office will review the bids of seven global companies and coalitions, says El Desouky

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The Egyptian Electricity Holding Company (EEHC) will be signing an agreement with the Belgian Tractebel Engineering Consultancy Company mid-March in order to evaluate the offers made to establish a coal-fired electricity plant with a capacity of 6,000MW.

Gaber El Desouky, head of EEHC, told Daily News Egypt that the consultancy company will handle the evaluation of the technical and financial offers made by seven global companies to establish a coal-fired electricity plant in the area of Hamrawein on the Red Sea coast.

He explained that all the technical and financial aspects were agreed upon with the Belgian consultancy, leaving only the official signing of the contract.

El Desouky refused to disclose the financial value of the contract with Tractebel, noting that coal-fired electricity plants are part of the Ministry of Electricity’s plan to diversify the sources of energy production to provide electricity without outages, as well as achieve sustainability.

He said that EEHC will cooperate with the consultancy office and EBC+Finance to award and contract with the winning company for the design, finance, establishment, and operation of the plant.

The bids offered from the Ministry of Electricity include Shanghai Electric, Dongfang Electric, and the coalitions of Harbin-General Electric, El Sewedy-Marub Eni, Mitsubishi-Hitachi, Sumitomo Electric, and APEC-Orascom.

The ministry plans to produce 7,000MW from coal-fired plants.

Sumitomo has made an offer to establish a coal-fired plant with a 2,000MW capacity in Sidi Shabib in Marsa Matruh operating with the ultra supercritical technology. The Mitsubishi-Hitachi coalition has offered to launch a coal-fired plant using the same technology in Marsa Matruh with a 4,000MW capacity.

Harbin-General Electric coalition has offered to establish an electricity production plant using clean coal with a 6,510MW capacity and investments worth $8bn. There was an agreement with three Chinese banks to finance the project to be implemented.

Shangahai Electric has made an offer to establish a coal-fired plant in Hamrawein with a 4,640MW capacity and investments worth $7bn.

Dongfang has offered to establish a plant operating with clean coal and a capacity of 6,000MW, also in Hamrawein.

The Ministry of Electricity has signed a memorandum of understanding with the El Sewedy-Marub Eni coalition to establish a coal-fired plant with a 4,000MW capacity in Western Matruh on the Mediterranean Coast, using the EBC+Finance system.

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Electricity Ministry to pay EGP 700m of fuel arrears to Petroleum Ministry https://dailynewsegypt.com/2017/03/02/electricity-ministry-will-pay-egp-700m-fuel-arrears-petroleum-ministry-next-week-2/ https://dailynewsegypt.com/2017/03/02/electricity-ministry-will-pay-egp-700m-fuel-arrears-petroleum-ministry-next-week-2/#respond Thu, 02 Mar 2017 08:59:21 +0000 http://www.dailynewsegypt.com/?p=616963 We aim to increase monthly amounts to EGP 1bn, says official

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The Ministry of Electricity is set to pay EGP 700m to the Ministry of Petroleum and Mineral Wealth next week, as part of the arrears it owes for fuel used for electricity production.

Sources at the Egyptian Electricity Holding Company (EEHC) is committed to pay EGP 500m per month for the fuel it uses to feed its plants, adding that the increase of arrears to EGP 41bn, forced the company to raise the monthly installments to EGP 700m.

A source told Daily News Egypt that the ministry aims to further increase the monthly installments to EGP 1bn.

He noted that the Ministry of Petroleum and Mineral Wealth will want to collect part of its arrears to commit to supplying power plants.

The total estimated value of fuel consumption of the Ministry of Electricity stands at EGP 3.6-3.9bn per month. The Ministry of Finance pays 50% of the bill on behalf of the electricity ministry.

Moreover, the source said that the Ministry of Electricity paid EGP 20bn to the Petroleum Ministry through the loan it obtained from Banque Misr and the National Bank of Egypt. The ministry also paid EGP 1.2bn from the collection of electric bills. Collectively, the ministry has paid EGP 21.2bn of its arrears to the Ministry of Petroleum, leaving EGP 41bn.

The source noted that the electricity sector is suffering from failure to collect consumption bills from sovereign institutions and government agencies.

The Holding Company for Water and Wastewater (HCWW), the Ministry of Religious Endowments, and sovereign bodies are the entities owing the most to the ministry.

Arrears of the business sector owed to the electricity sector amounted to EGP 9bn.

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Arab companies are seeking to invest in Egypt’s energy sector https://dailynewsegypt.com/2017/02/27/arab-companies-seeking-invest-egypts-energy-sector/ https://dailynewsegypt.com/2017/02/27/arab-companies-seeking-invest-egypts-energy-sector/#respond Mon, 27 Feb 2017 14:45:15 +0000 http://www.dailynewsegypt.com/?p=616564 Safwan allocated $2m for oil field testing, while Al Mousa is targeting sales of $35m during 2017

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The Emirati Safwan Petroleum Technologies company allocated $2m initial investments for the Egyptian market.

Magdy Aziz, the company’s general manager, said they agreed with Tanmeya Investment Company on conducting tests on its oil wells, with equipment arriving from India in about two months.

Tanmeya Investment Company’s scope includes oilfield development, whether new or old, maintaining and increasing production, providing facilities and services for early production, excavation, and repair and maintenance of wells.

The company is also responsible for providing consultancy and technical support to carry out integrated operations of drilling and production, providing skilled labour, preparing studies related to reservoirs and production, reviewing of development plans, and maximising production plans.

Aziz stated that the legislation and laws governing investment in Egypt are excellent and protect all Arab and international companies, adding that Safwan drew up an integrated plan to invest in Egypt, and initiated it in collaboration with Tanmeya.

Al-Mousa Specialized Cables announced that it is targeting to achieve sales of $35m in the Egyptian market during 2017.

Hesham Monier, vice CEO at the company, said that the company concluded contracts with Egyptian companies to supply cables and wires, including Orascom Construction, Arab Contractor, and Petrojet companies.

He added that the Egyptian market is a promising and attractive market for investment and the company is seeking to increase its number of branches and create new alliances to serve industrial projects and assist the government in its development until 2030.

He added that the company has been working for 25 years in Saudi Arabia, and the company uses the profit margin of cables distribution in proliferation and diversity,  increasing the number of branches of the company, as well as increasing the size of its business in the Egyptian market— especially since it is the exclusive representative of MESC Cables Company.

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Unpaid dues to electricity ministry register EGP 1.2bn at end of December https://dailynewsegypt.com/2017/02/09/615124/ https://dailynewsegypt.com/2017/02/09/615124/#respond Thu, 09 Feb 2017 14:59:01 +0000 http://www.dailynewsegypt.com/?p=615124 The unpaid dues of business sector companies to the Ministry of Electricity and Energy amounted to EGP 1.2bn at the end of December. Sources from the Egyptian Electricity Holding Company (EEHC) said that the ministry suffers from a lack of liquidity, which may affect the electricity supply. They added that business sector companies, a number …

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The unpaid dues of business sector companies to the Ministry of Electricity and Energy amounted to EGP 1.2bn at the end of December.

Sources from the Egyptian Electricity Holding Company (EEHC) said that the ministry suffers from a lack of liquidity, which may affect the electricity supply.

They added that business sector companies, a number of government agencies, and some local administrations did not pay their electricity consumption bills, pointing out that some leaders of electricity distribution companies have visited a number of companies several weeks ago to ask them to pay their dues.

Minister of Public Sector Affairs Ashraf El-Sharkawy has demanded the holding companies affiliated with the ministry to pay or schedule their dues to the ministries of petroleum and electricity.

El-Sharkawy faces four major problems with the textiles sector, including its debts to social insurance, electricity, gas, and banks; as well as outdated machinery and the high fuel prices.

According to sources, El-Sharkawy will hold meetings with Minister of Electricity Mohamed Hamed Shaker to discuss scheduling the debts.

The sources pointed out that the repayment of dues is important to help electricity companies to fulfill their obligations in order to provide electricity supply and finance the establishment of new projects for production, transmission, and distribution of electricity nationwide.

The sources stressed that the companies should pay their monthly electricity bills as well as the scheduled dues, so that each sector can fulfill its duties.

Osama Asran, Deputy Minister of Electricity, held a meeting on Wednesday with leaders of commercial sectors to discuss improving performance of companies and follow up on the procedures of collecting the bills.

Asran stressed the necessity to solve any complaints regarding electricity bills through reviewing the bills before sending them to subscribers. He also called on reviewing the electricity meters to ensure the rights of citizens and companies.

The meeting also tackled a number of topics, including the citizens’ complaints about high electricity bills, the collection of dues, and the development of new mechanisms to improve business performance indicators.

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The launch of new and renewable energy projects in 2017 https://dailynewsegypt.com/2017/01/21/launch-new-renewable-energy-projects-2017/ https://dailynewsegypt.com/2017/01/21/launch-new-renewable-energy-projects-2017/#respond Sat, 21 Jan 2017 14:33:13 +0000 http://www.dailynewsegypt.com/?p=611404 Companies confirm the attractiveness of the investment sector and demand additional incentives and acceleration in the proceedings

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Investors in the new and renewable energy sector have high expectations for 2017 to be a year of progress and to mark the beginning of implementing solar plant and windfarm projects.

Investors believe that the new and renewable energy market in Egypt is an attractive market for investment, but needs fast procedures and additional incentives and legislation to bring international companies to invest in the energy sector.

Human and managerial resources manager at Infinity Solar Systems, Hesham El-Gamal said that the Ministry of Electricity has spent the whole last year studying the economics of new and renewable projects and the decline of the mechanisms that organise the investment process.

He added that this year will see the launch and progress of projects, explaining that new and renewable energy projects need a clear vision, especially since all foreign investors are waiting for the result of the first phase of the feed-in tariff, in which nine entities signed an agreement to buy energy from the nine companies with the Egyptian Electricity Transmission Company (EETC).

He stressed the need to provide additional incentives and benefits for companies to attract foreign companies, especially in light of the existence of other markets such as Jordan and the United Arab Emirates (UAE), which offer many incentives for investors to achieve sustainable development.

He called on the Ministry of Electricity to reconsider the tariff purchase of wind power because it is unprofitable and has no return on investment, and to reduce the value of cost-sharing and letters of guarantee for the submitted projects.

The Ministry of Electricity seeks to contract on power production projects from renewable sources such as solar and wind power plants, through the private sector, according to the feed-in tariff system, with a capacity of 4,300 MW and investments of up to EGP 7bn.

Mohamed El-Daley, project management director at Desert Technologies Company, said that 2017 will not witness any additional new and renewable energy projects. Agreements and the adoption of the contracts that have been signed over 2016 will be completed, along with the completion of talks on the second phase of the feed-in tariff.

He explained that the government plays a big role this year in sending a message of reassurance to investors about the seriousness of implementation of projects, especially since companies that had invested in the renewable energy sector two years ago did not begin the actual steps to implement their projects so far.

He called on the Ministry of Electricity to facilitate the procedures for investors, and to provide incentives to encourage investors not to head to other markets such as Jordan, the UAE, Iran, and Morocco.

Egypt has a great opportunity to make progress in the renewable energy sector during the current year in light of the participation of more than 100 local and international companies in the feed-in tariff and competitive tenders offered by the EETC to establish solar and wind plants with a capacity of 550 MW, he stated.

Hassan Amin, regional manager for Aqua Power Company, said that the investment opportunities in the field of renewable energy in Egypt are considered unique, especially since a number of foreign countries have come close to achieving self-sufficiency in the production of alternative energies.

He explained that the government is required to develop a strategy for the energy sector to ensure the inflow of investments, especially since the liberalisation of the exchange rate. The flotation was a good decision, and must be followed by further decisions to attract investors, including the identification of amount of investment Egypt needs during the coming period.

He pointed out that this year will see a development in the implementation of solar energy projects. Companies that complete feed-in tariff projects are seeking to raise financing for the projects. The tariff structure should be reconsidered to encourage investment, he explained.

Ahmed Ayyad, project manager at Philadelphia Energy, said that among the motivating factors to establish a solar power plant in Egypt is the feed-in tariff system, but so far, there is no clear vision to it.

Ayyad continued that the delayed procedures negatively affect projects, and that the New and Renewable Energy Authority should consider the Jordanian experience in tariff projects.

He predicted that the current year will witness an evolution in the completion of the second phase of the power purchase agreement in the feed-in tariff projects to be signed with investors, and to be actually implemented.

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31 companies participate in 2nd phase of feed-in tariff projects with $3bn investments https://dailynewsegypt.com/2017/01/12/31-companies-participate-2nd-phase-feed-tariff-projects-3bn-investments/ https://dailynewsegypt.com/2017/01/12/31-companies-participate-2nd-phase-feed-tariff-projects-3bn-investments/#comments Thu, 12 Jan 2017 12:47:34 +0000 http://www.dailynewsegypt.com/?p=609949 1,845 megawatts targeted to be produced through solar and wind plants in Aswan and Gulf of Suez

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Thirty-one companies operating in the field of renewable energy are participating in the second phase of the feed-in tariff projects to establish solar and wind projects with a capacity of 1,845 megawatts and investments worth $3bn.

Sources in the Ministry of Electricity said that 23 companies will establish solar plants with a capacity of 1,295 megawatts: 970 megawatts in Banban, 180 megawatts in El-Zafarana, and 145 megawatts in West Nile. Also, eight companies are participating to establish wind plants with a total capacity of 550 megawatts in Gulf of Suez.

The New and Renewable Energy Authority agreed on moving the locations of six companies from El-Zafarana and West Nile to Banban in Aswan. The lands delivered by the investors who withdrew from the feed-in tariff projects will be delivered to these six companies.

According to the execution controls of the second phase of the feed-in tariff programme of the renewable energy projects, 60% of the financing of the wind power projects should be from foreign financing sources and the remaining 40% should be from local financing sources. With regard to the solar power projects, the controls stipulate that 70% of their financing should be from foreign financing sources and the remaining 30% should be from local financing sources.

According to the power purchase agreement, in case any dispute occurs between the Egyptian Electricity Transmission Company and the investors, the arbitration will be in the Cairo Regional Centre for International Commercial Arbitration, with the ability to hold it in Paris upon the agreement of both parties of the contract.

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Media Production City negotiates with AOI to establish solar power plant worth EGP 17m https://dailynewsegypt.com/2017/01/05/media-production-city-negotiates-aoi-establish-solar-power-plant-worth-egp-17m/ https://dailynewsegypt.com/2017/01/05/media-production-city-negotiates-aoi-establish-solar-power-plant-worth-egp-17m/#respond Thu, 05 Jan 2017 16:01:14 +0000 http://www.dailynewsegypt.com/?p=608641 Sources in Media Production City said that they are currently studying AOI’s financial proposal for the project

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Media Production City negotiates with the Arab Organization for Industrialization (AOI) to establish a solar power plant with a capacity of 300 kilowatts and a total investment of EGP 17m.

Sources in Media Production City said that they are currently studying AOI’s financial proposal for the project.

The sources added that the solar power plant will be connected to the national electricity grid according to the feed-in tariff system, and they will contract to purchase a batteries charging system to run electric poles at night.

The sources pointed out that AOI is one of the best companies working in the field of solar energy, as the company carried out a number of projects with capacities of up to 500 kilowatts.The company is seeking to expand local products through the production line of solar cell assembly.

Former prime minister Ibrahim Mehleb inaugurated the production line of solar panels in August 2015. The production line operates 24 hours over three shifts to produce approximately 50 megawatts per year.

AOI completed the establishment of five plants in the North Cairo Electricity Distribution Company with a capacity of 15 kilowatts per station, and the establishment of a plant in the Canal Company for Electricity Distribution (CCED) with a capacity of 25 kilowatts.

This is in addition to a small solar power plant with a capacity of a 60-kilowatt building for the Information Center for the Greater Cairo Utilities Network.

AOI is set to establish four solar power plants on top of a military building with a total capacity of 135 kilowatts.

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Operation, maintenance for electricity plants to cost EGP 11bn in 2017: Electricity Ministry https://dailynewsegypt.com/2017/01/05/operation-maintenance-electricity-plants-cost-egp-11bn-2017-electricity-ministry/ https://dailynewsegypt.com/2017/01/05/operation-maintenance-electricity-plants-cost-egp-11bn-2017-electricity-ministry/#respond Thu, 05 Jan 2017 15:39:46 +0000 http://www.dailynewsegypt.com/?p=608637 Electricity Ministry collects EGP 7bn in bills revenues, awaits EGP 4bn from the government

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The Ministry of Electricity has allocated EGP 11bn for operation and maintenance costs for electricity production and distribution plants in 2017.

Government sources said that the amounts spent on the maintenance and operation of these plants is provided through the collection of electricity consumption bills, where about EGP 7bn has been collected so far, with the ministry seeking to collect about EGP 4bn from the government in order to provide power without outages.

The sources explained that the Ministry of Electricity was owed late dues by government agencies until December, estimated at EGP 80bn, whereas its dues owed by the Petroleum Ministry are estimated at EGP 65bn. A committee was formed to resolve the financial conflicts between the ministries and authorities.

The sources said that the amounts allocated by the Electricity Ministry for the operation and maintenance of these electricity plants do not include the value for necessary fuel.

President Abdel Fattah Al-Sisi has promised Electricity Minister Mohamed Shaker that necessary investments would be provided to the electricity sector in order to provide high-quality power without outages.

Tarek Amer, the governor of the Central Bank of Egypt (CBE), said in previous reports that funds worth $1.5bn obtained by Egypt over the past few days—with $1bn coming from the World Bank and $500m from the Arab African International Bank (AAIB)—will be used to pay the dues owed by the government and will not be added to the CBE’s cash reserves.

Amer explained that the amount will be used to pay for importing fuel and liquefied gas for electricity plants, in addition to the credits of the Ministry of Supply, as well as repay government debts and its general financial commitments for the operation and maintenance of electricity plants projects.

El-Husseiny El-Far, a member of the electricity companies’ distribution affairs in the Electricity Ministry, said that that the cost of the annual plan of the maintenance of electricity plants, grids, transformers, and cables in all electricity distribution companies in 2017 will reach EGP 1.250bn, and will increase after the dollar price increases.

He added that electricity distribution companies have presented the first part of the requirements of the maintenance programme to supply cables and wires, where contracting was carried out with the dollar price set at the pre-flotation price of EGP 8.88.

He explained that the second part of the supplies will be according to the needs of companies. All of the components to be purchased will be expensive compared to previous contracting, especially after the liberalisation of the exchange rate and the dollar price reaching EGP 19.

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How a fluctuating oil market is likely to impact Egypt https://dailynewsegypt.com/2016/12/24/fluctuating-oil-market-likely-impact-egypt/ https://dailynewsegypt.com/2016/12/24/fluctuating-oil-market-likely-impact-egypt/#respond Sat, 24 Dec 2016 17:24:42 +0000 http://www.dailynewsegypt.com/?p=606469 The oil market has been in decline for a considerable period of time, having experienced three consecutive years during which supply has outstripped demand. This has continued to drive prices down and created a depreciating marketplace, while forcing the intergovernmental Organisation of the Petroleum Exporting Countries (OPEC) to take decisive action.

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The oil market has been in decline for a considerable period of time, having experienced three consecutive years during which supply has outstripped demand. This has continued to drive prices down and created a depreciating marketplace, while forcing the intergovernmental Organisation of the Petroleum Exporting Countries (OPEC) to take decisive action.

After initially brokering a deal through which member nations agreed to reduce their output to 1.2m barrels per day (bpd), the group has since met with non-OPEC oil producers to initiate further coordinated cuts. The two deals are contingent on one another, with non-member countries expected to agree to a production cap in the region of 600,000 bpd.

Will the cap work and what does it mean for Egypt?

The prospect of this meeting and the initial deal brokered with OPEC nations initially sent prices soaring by 15%, despite suggestions that Iran may be loathed to agree to such a cut. This initial boon has subsequently subsided, amid data which suggests that rising production levels have been reported in Iran and prominent, non-OPEC countries like Russia.

Even though the majority of countries now appear to be in agreement with OPEC’s proposal, there are several potential pitfalls including political issues and the non-participation of certain nations, including Kazakhstan and Brazil—both of which plan to increase production in 2017.

Interestingly, Egypt may also suffer adversely as a result of the cap. This is despite the fact that, as a non-OPEC, oil producing nation, the populous North African region only generates an estimated 600,000 bpd day and would find it easy to comply with the new restrictions. Its large population means that the government often has to rely on subsidies from OPEC neighbours, such as Saudi Arabia, and these may not be easy to come across under the terms of the new agreement.

There are also political issues, as the Saudi government are in a position in which they are able to determine precisely how they scale down their production. So, while they are likely to dramatically reduce output to high volume outlets such as the United States, they will also continue to restrict their shipments to Egypt as a result of an ongoing political dispute and concerns over a perceived lack of economic reforms within the region. November even saw the Saudis temporarily halt oil shipments as part of a previously agreed  $23bn aid deal as the gap between the two regions grew substantially wider.

The bottom line

Not only has the lack of oil supply constrained the marketplace and created challenges for contract for difference traders in particular, but it has also put Egypt at risk of a potential oil shortfall. With the absence of political reform in the region and a global supply cap further reducing the amount of oil that can be shipped from prolific partners such as Saudi Arabia, Egypt may be forced to redistribute its own resources or seek a supply from elsewhere. This may have an impact on the nation’s GDP and economic stability, so the nation will be hopeful that oil prices increase soon in the absence of a viable agreement with the Saudis.

 

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Renewable energy investors call for presidential intervention https://dailynewsegypt.com/2016/12/20/renewable-energy-investors-call-presidential-intervention/ https://dailynewsegypt.com/2016/12/20/renewable-energy-investors-call-presidential-intervention/#comments Tue, 20 Dec 2016 15:01:05 +0000 http://www.dailynewsegypt.com/?p=605794 100 international companies willing to invest $15bn if government expedites investment procedures

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Renewable energy investors called upon President Abdel Fattah Al-Sisi to intervene in order to allow them to complete their projects in Egypt, such as the Siemens windmill and the feed-in tariff projects.

Investors told Daily News Egypt that over 100 international companies are ready to inject investments of up to $15bn, but are reluctant due to Egypt’s lack of vision and obstacles that slow the procedure down.

Investors pointed to the shoddy financial situation of the Egyptian Electricity Transmission Company (EETC) as one of the reasons Egypt’s procedures are slow. “Companies in the first phase of the feed-in tariff projects have not been announced, even though financial closure was submitted two months ago,” one investor said.

Moreover, the investors pointed out that the government should support new and renewable energy projects to diversify sources of electricity production through the issuance of the feed-in tariff law or by signing direct contracts that have not been implemented yet.

The Ministry of Electricity aims to maximise the portion by which renewable sources contribute to electricity grid in Egypt to over 37% by 2035.

The human resources director at Infinity Solar, Hisham El-Gamal, said that his company signed the power purchase agreement with EETC in the first phase but it has not been approved yet.

He explained that the German bank that funded the project imposes daily fees on the company even though the loan has not yet been utilised. “This causes hefty losses,” he added.

Head of the projects department at Desert Technology Mohamed El-Deley said that the procedures of implementing the renewable energy projects in Egypt are very slow. “They drive companies away,” he stressed.

El-Deley called for the intervention of the prime minister and the president himself to fulfil their ambitious plan of diversifying electricity sources.

 

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Shell offers Rosetta concession for sale https://dailynewsegypt.com/2016/12/20/shell-offers-rosetta-concession-sale/ https://dailynewsegypt.com/2016/12/20/shell-offers-rosetta-concession-sale/#respond Tue, 20 Dec 2016 14:47:22 +0000 http://www.dailynewsegypt.com/?p=605792 The government owes Shell $1.3bn for their share of the gas field, says source

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The Dutch Shell Company has offered the Rosetta concession in Rashid for sale to any foreign company.

A source close to the company told Daily News Egypt that Shell decided not to carry out any development operations in Rosetta. “Development will be expensive with almost no economic feasibility, considering the price of gas produced there,” he explained.

He said the Rosetta field currently produces 40 million cubic feet of gas per day and will stop producing by July as the natural decay of productivity is not offset by development.

He pointed out that British Petroleum (BP) acquired the Rosetta gas treatment plant in Rashid from Shell for $128m. BP received the plant in April and began preparations to link it to Fayoum and Giza fields.

The source said that the maximum capacity of the Rosetta gas treatment plant is 425 million cubic feet of gas per day, of which 420 million cubic feet will come from Fayoum and Giza fields by 2019.

He added that Royal Dutch Shell moved the current supply extracted at the Rosetta field to the Borollos gas treatment plant after selling the Rosetta gas treatment plant to BP.

The source explained that Shell has reduced its investments for the current fiscal year in Borollos and Rashid concession areas to cover only operation and maintenance costs. He added that in the fiscal year (FY) 2016/2017 Shell plans on investing $158.9m, down from $222m in FY 2015/2016.

He said the company allocated about $96.7m to operate the Borollos field and $38m for periodical maintenance.

He added that Shell allocated $22.7m for operational costs of the Rosetta field and $1.4m for field maintenance without new developments.

He noted that production of Borollos and Rashid fields naturally declines by 10m cubic feet of gas per day.

Daily News Egypt had previously revealed that the Ministry of Petroleum owes Shell $1.3bn, for their share of the gas produced from the Rashid and Borollos fields.

The government collects roughly $50m a month in dues owed to Shell for the Borollos and Rashid fields, however; they have been unable to pay the company due to the ongoing foreign currency shortage.

 

 

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33 companies present their bids for Kom Ombo 20 MW solar plant https://dailynewsegypt.com/2016/12/18/33-companies-present-bids-kom-ombo-20-mw-solar-plant/ https://dailynewsegypt.com/2016/12/18/33-companies-present-bids-kom-ombo-20-mw-solar-plant/#comments Sun, 18 Dec 2016 15:05:10 +0000 http://www.dailynewsegypt.com/?p=605399 The list includes Orascom, Infinity, and Shanghai Electric

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Thirty-three local and international companies presented their bids for the tender launched by the New and Renewable Energy Authority (NREA) to establish a 20 MW solar plant in Kom Ombo with the Agence Française de Développement (AFD).

Daily News Egypt received the list of the companies, which included the Egyptian-Chinese Alliance, Tebian Electric Apparatus (TBEA), as well as Sterling and Wilson, Générale du Solaire, Complete Energy Solutions, Orascom Construction, Nasr Solar, and Infinity Solar Systems.

Moreover, the list also included Isolux Solar, Dongfang Electric, and Shanghai Electric Group.

Sources at the ministry said that TBEA presented two offers, where one will be excluded and only one will be studied.

The sources added that all bids will be studied to shortlist a few companies to choose the best technical and financial offers, noting that the tender stipulated companies to have conducted €45m worth of construction investments before.

In addition, the sources said that the government contracted with DNV KEMA and Engineering Research & Consulting Company to prepare technical and economic feasibility studies and its impact on communities and the environment.

The AFD will provide a loan of €40m to finance the establishment of a 20 MW solar power plant in Kom Ombo in Aswan.

The funding includes the rehabilitation of infrastructure and a contract for the operation and maintenance of the plant for three years, as well as a training programme.

This plant will add approximately 40 GWh to the national electricity grid, in addition to reducing the carbon resulting from the generation of electricity, equivalent to 15,000 tonnes of carbon dioxide annually.

The project consists of photovoltaic cells that convert solar light into direct current, as well as inverters that convert direct current into alternating current.

 

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Shell seeks expandings in Egyptian market: Haytham Yehia https://dailynewsegypt.com/2016/12/14/shell-seeks-expandings-egyptian-market-haytham-yehia/ https://dailynewsegypt.com/2016/12/14/shell-seeks-expandings-egyptian-market-haytham-yehia/#respond Wed, 14 Dec 2016 19:08:56 +0000 http://www.dailynewsegypt.com/?p=604800 The post Shell seeks expandings in Egyptian market: Haytham Yehia appeared first on Daily News Egypt.

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General Electric carries out $80m maintenance in Koraymat, North Giza power plants https://dailynewsegypt.com/2016/12/14/604772/ https://dailynewsegypt.com/2016/12/14/604772/#respond Wed, 14 Dec 2016 17:03:40 +0000 http://www.dailynewsegypt.com/?p=604772 General Electric began maintenance works to raise the efficiency of Koraymat and North Giza power plants at a cost of $80m. The company is maintaining and raising the efficiency of two units in Korayman power plant at a total cost of $70m ($35m each), and is maintaining North Giza power plant at a cost of …

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General Electric began maintenance works to raise the efficiency of Koraymat and North Giza power plants at a cost of $80m.

The company is maintaining and raising the efficiency of two units in Korayman power plant at a total cost of $70m ($35m each), and is maintaining North Giza power plant at a cost of $10m, a source in the Ministry of Electricity said.

The source added that General Electric’s dues in the past six months reached $180m, as maintenance operations were conducted for the power production units in Mahmoudeya, Nubareya, and north Delta, as well as in other production units.

He said also the company executed maintenance works varying between simple, regular, and significant categories. The kind of maintenance depends on the condition of the production unit and turbine. The maintenance is considered significant if it is conducted after the plants have operated for 36,000 hours; regular for 24,000 hours of operation; and simple for about 8,000 hours of operation.

He pointed out that undergoing maintenance works for the electricity production units increase their efficiency and technical condition. They also renewed the oils, grease, pipes, turbine cables, and generating units.

The source revealed that the examination of the units will start next week, so as to resume operations at full capacity later this month after the maintenance works.

The ministry has developed a plan to implement replacement, renovation, and maintenance operations in the plants so as to save fuel and enhance their efficiency, instead of building new plants that cost the state huge amounts of money, according to the source.

The latest technology entry to the plants and work system is underway, and operation systems will be converted to combined-cycle systems to reduce fuel consumption.

The Ministry of Electricity has started to prepare a plan for the coming summer to increase the efficiency of power plants, add new electrical capacities, develop electric transmission grids, rationalise energy, and improve projects.

The electrical transmission grid, which reaches 1,210km in length, has been developed with transformers and high voltage towers with investments worth EGP 12bn.

 

 

 

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3 gas shipments exported through Edco plant by Shell since September https://dailynewsegypt.com/2016/12/13/3-gas-shipments-exported-edco-plant-shell-since-september/ https://dailynewsegypt.com/2016/12/13/3-gas-shipments-exported-edco-plant-shell-since-september/#respond Tue, 13 Dec 2016 14:47:04 +0000 http://www.dailynewsegypt.com/?p=604489 Supply from Borollos fields gradually being increased to 250m feet of gas

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The Dutch oil company Shell has exported three liquefied gas shipments to international markets through its Edco plant for liquefaction since September, after it obtained 200m cubic feet of gas per day from production at the Borollos fields.

A senior source at the petroleum sector told Daily News Egypt that Shell targets to export liquefied gas shipments every 20 days according to Edco’s current supply rates.

Shell agreed with the Ministry of Petroleum on gradually increasing quantities specified for export to 250m cubic feet per day, to achieve a return that will help the company to repay loans due in instalments.

The source added that the Ministry of Petroleum targets to operate Edco plant at full capacity in order to export liquefied gas shipments to international markets by fiscal year 2020/2021.

The contractual share of Edco plant registered 1.13bn cubic feet of gas per day, while the pumping rates declined since 2011 until 2015.

The Egyptian General Petroleum Corporation (EGPC) repaid $480m of Edco’s outstanding instalments to the bank before stopping operations at full capacity in 2012—thus, the foreign partner resorted to international arbitration against Egypt.

The source said Edco plant repays banks in instalments at roughly $200m annually, out of a loan worth $2bn obtained by the company to implement liquefaction units.

He added that the factory is required to export 22 shipment of liquefied gas annually, in order to achieve self-sufficiency between its revenues and expenditures.

The source pointed out that the government is planning to allow Edco plant to import liquefied gas from Cyprus to rerun it at full capacity in order to achieve economic returns for the state and foreign partners by 2020.

The plant is designed to function for a period of 340 days a year; production will be suspended for a month for the maintenance of units. Maintenance costs are estimated at $20m annually.

He explained that the EGPC contributes with 12%, EGAS with 12%, BG company with 35.5%, PETRONAS with 35.5%, and Engie with 5% to the plant.

 

 

 

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Production from Rosetta gas field to cease in July https://dailynewsegypt.com/2016/12/11/production-rosetta-gas-field-cease-july/ https://dailynewsegypt.com/2016/12/11/production-rosetta-gas-field-cease-july/#respond Sun, 11 Dec 2016 15:18:54 +0000 http://www.dailynewsegypt.com/?p=604047 The company refused to pay for developments to offset the natural decline in production

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The daily production of 40bn cubic feet of gas from the Rosetta field in Shell’s Rashid concession area will cease in July 2017, as the company refuses to pay for field development to offset the natural decline in production while dues owed by Egyptian government continue to accumulate.

A senior source at the Egyptian Natural Gas Holding Company (EGAS) told Daily News Egypt that development of Rosetta gas field requires huge funds but lacks economic feasibility to the foreign partner based on the current price of the gas produced from there.

BP acquired the Rosetta gas treatment plant in Rashid from Shell for $128m and received the field in April, then began preparing to link production of Fayoum and Giza fields to it.

The source said that the maximum daily capacity of the Rosetta gas treatment plant is 425m cubic feet of gas, of which 420m cubic feet will come from Fayoum and Giza fields by 2019.

He added that Royal Dutch Shell moved the current production of Rosetta field to Borollos gas treatment plant after selling the Rosetta gas treatment plant to BP.

The source explained that Shell has reduced its investments in Borollos and Rashid concession areas for the current fiscal year to support operation and maintenance at a limit of $158.9m, down from $222m in the fiscal year of 2015/2016.

Shell allocated $22.7m for the operational costs of Rosetta field and $1.4m for field maintenance without developing the field.

He noted that production from Borollos and Rashid fields naturally declines by 10m cubic feet of gas per month.

Daily News Egypt had previously revealed that the Ministry of Petroleum owes Shell $1.3bn, for the foreign partner share of the gas produced from Rashid and Borollos fields.

The government obtains the foreign partner’s share in Borollos and Rashid gas at $50m per month; yet, the dues are not paid in time due to the foreign currency shortage in Egypt.

 

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KarmSolar announces 3 major agreements at first annual forum https://dailynewsegypt.com/2016/12/10/karmsolar-announces-3-major-agreements-first-annual-forum/ https://dailynewsegypt.com/2016/12/10/karmsolar-announces-3-major-agreements-first-annual-forum/#respond Sat, 10 Dec 2016 12:01:09 +0000 http://www.dailynewsegypt.com/?p=603847 News will impact agribusiness, architecture, start-ups, and real estate through partnerships with EFG Hermes, RiseUp, and Azza Fahmy

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KarmSolar, a solar technology company in Egypt, made several major announcements at its first annual forum held on 8 December, which is a RiseUp Summit 2016 satellite event. The event showcased the intersection of solar energy with multiple industry sectors, including agriculture, architecture, start-ups, real estate, and the government.

KarmSolar revealed partnerships with RiseUp, Azza Fahmy, and EFG Hermes during the forum.

The company announced a technological innovation that will revolutionise the use of solar power in agribusiness in Egypt.

KarmSolar’s research and development team have created and patented a technological breakthrough that will drive significant growth of solar energy in pumping water to agricultural projects in Egypt as a result of massive cost reductions. This innovation is called the Maximum Power Point Tracking algorithm, which was designed based on local needs and specifications. In solar pumping drives, this component was previously a huge cost burden for off-grid water pumping.

“With projects like the 1.5m acres reclamation project, and the reduction of subsidies on conventional energy sources, solar pumping will come in very high demand in the next 3-5 years,” said Randa Fahmy, co-founder of KarmSolar and head of research and development. She added that the company identified the opportunity to design and develop the technology locally, and create an integrated solution that is better adapted to local needs and more efficient.

Fahmy noted that the KarmSolar patented end-product will be able to utilise the maximum available solar energy at any given moment, thereby operating at maximum efficiency.

The creative director of the luxury Egyptian jewelry house Azza Fahmy is collaborating with KarmBuild on building the KarmSolar SahlHasheesh Campus Headquarters. Azza Fahmy will implement a design methodology that places value on the character of designs and has clear interpretations of culture and heritage and translates them into modernised designs. Using this methodology, the KarmSolar SahlHasheesh Campus Headquarters features inspirations by various elements, such as the Palmetto plant, of Pharaonic and Roman origins, and Pharaonic ceilings in temples in Aswan and Nubian architecture, and finally traditional architectural motifs.

EFG Hermes Leasing, the leasing arm of leading Middle East and North Africa financial services corporation EFG Hermes, has entered into a strategic partnership to offer lease finance solutions for solar energy projects in Egypt. The collaboration with KarmSolar is the first of its kind in the industry. It will provide sustainable solar energy solutions through the structuring of financing plans tailored to Egyptian businesses with demand for renewable energy.

Wael Ziada,  the executive chairperson of EFG Hermes Finance, said that the combination of KarmSolar’s expertise in solar energy solutions and EFG Hermes Leasing’s innovative approach to financing will create new opportunities for businesses across all industries while promoting eco-friendly, environmentally sustainable solutions with a positive social impact.

“The programme is the most aggressive financing scheme for solar stations in the Egyptian market,” KarmSolar CEO and co-founder Ahmed Zahran noted.

He added that the financing agreement with EFG Hermes Leasing is a great milestone that will have significant impact on breaking those barriers.”Proving that solar energy is an accessible alternative,” he stressed.

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Electricity minister to send president memo on Dabaa negotiations next week https://dailynewsegypt.com/2016/12/08/electricity-minister-send-president-memo-dabaa-negotiations-next-week/ https://dailynewsegypt.com/2016/12/08/electricity-minister-send-president-memo-dabaa-negotiations-next-week/#respond Thu, 08 Dec 2016 11:30:50 +0000 http://www.dailynewsegypt.com/?p=603594 The ministry has banned officials from comment until the contracts are complete; negotiations are in final phase, says minister

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Minister of Electricity Mohamed Shaker is set to present a detailed memo to the president next week, on the latest developments of the Dabaa nuclear plant negotiations with Russian company Rosatom.

A government source told Daily News Egypt that negotiations are very accurate and discrete. both parties are discussing the safety of reactors during the establishment phase and the provision of nuclear fuel. “Every decision will be final,” he stressed.

The source said added that the consultant hired by the Ministry of Electricity has attended all negotiations, and 90% of the contracts are finalised.

The Ministry of Electricity has banned all its officials from discussing the negotiations.

Shaker told Daily News Egypt that the negotiations are in their final stage.

The source also said that a high-level Russian delegation will arrive in Cairo next week to follow up the project site measurements in Dabaa.

The Egyptian government agreed with Rosatom to establish Dabaa nuclear power plant with a 4,800MW capacity. The agreement includes building nuclear fuel storage facilities to supply the nuclear plant with the required nuclear fuel throughout the 60-year operational period. Rosatom will also manage nuclear waste, maintenance, and operations for 10 years.

Russia will provide Egypt with a $25bn loan to finance the necessary construction equipment and the operation of the plant in Dabaa.

The loan is used to finance 85% of the value of each contract to implement works, services, and shipments for the project. The Egyptian side will pay the remaining 15% in the form of instalments. The amount will be paid for the benefit of authorised Russian institutions according to the contracts, either in the form of an advance or as a payment that is made later after implementing the works and services, and delivering supplies. The loan has a 13-year term from 2016 to 2028, with a 3% annual interest rate.

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Government postpones execution of $15bn worth of electricity projects https://dailynewsegypt.com/2016/12/08/603571/ https://dailynewsegypt.com/2016/12/08/603571/#respond Thu, 08 Dec 2016 10:23:50 +0000 http://www.dailynewsegypt.com/?p=603571 The list includes plants in Dairout, Damanhour, El-Hamrawein, El-Mahmoudeya, Ataqa, and Qena; projects transferred to 2022-2027 Plan due to financial burdens and production surplus, say sources

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The government has decided to postpone the execution of all projects in the 2017-2022 Plan and instead include them in the 2022-2027 Plan due to an increase in financial burdens following the flotation of the national currency in November as well as surplus electricity production.

Official sources said this postponement includes plants in Dairout, Damanhour, El-Hamrawein, El-Mahmoudeya, Ataqa, and Qena. The investments in these projects amount to approximately $15bn.

The Ministry of Electricity has a daily production surplus of 3,000MW, the sources said. This is expected to reach approximately 7,000MW by the end of the year, after the capacities of the first phase of the Siemens plants in Beni Suef and El-Borollos are added, as well as the New Administrative Capital.

An official in the Egyptian Electricity Holding Company (EEHC) said the growth rates for these capacities are weak—the growth rate of production is 6.3% while that of the capacities is 7%. This resulted in the ministry postponing these projects so as to not bear an excessive burden.

The official added that company representatives were informed of the ministry’s decision. The Dairout project is expected to be moved to another location—to be announced at the EEHC’s next meeting, according to the official.

The Ministry of Electricity held a series of discussions with the Saudi company Acwa Power about establishing Dairout power plant with a capacity of 2,250MW and investments of $2.7bn. However, after the ministry’s decision, new discussions will be held over the location of the project.

The sources said that the total cost of Damanhour power plant is $1.3bn—about $600m of which are a contribution by European Investment Bank, and $200m a contribution by Arab Fund for Economic & Social Development, while the public West Delta Electricity Production Company will contribute $240m.

The sources said that the ministry will receive offers from six companies from the US, Japan, China, and Korea in March 2017 to establish a coal power plant in El-Hamrawein area with a capacity of 6,000MW and investments of $8.5bn.

The projects that have been transferred to the Ministry of Electricity’s 2022-2027 Plan include switching both plants of Ataqa and El-Mahmoudeya to work with the compound cycle system, as well as establishing Qena power plant with a capacity of 1,300MW. The investments of both projects account for about $2bn.

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