The government will extend the removal of electricity subsidies over five years, instead of the previously announced three years, Minister of Electricity Mohamed Shaker announced during the “Egypt…Future’s Path” conference.
The decision to extend the implementation period was made to ease the burden on Egyptian citizens, the minister noted.
During the conference, Minister of Planning Ashraf El-Araby said the government is planning to introduce a feed-in tariff for new and renewable energy “within the coming weeks”.
A feed-in tariff encourages investment by offering long-term contracts to renewable energy producers based on the production cost of the technology.
A possibility raised during the conference was the Ministry of Finance acting as a guarantor between investors and the Ministry of Electricity to ensure continuous power supply.
However, the ministry is also looking into alternative policies as the suggestion “might place a financial burden on the finance ministry”, El-Araby said.
Shaker stated that around EGP 9m will be allocated to offer subsidised electricity to low-income Egyptians, who consumer smaller unites of electricity. He pointed out that that figure “will not be borne by the state’s budget”.
On Sunday, former electricity minister Ahmed Emam told Daily News Egypt that the country could have successfully added 2,400MW in capacity to the national grid at the beginning of 2014.
Explaining the electricity blackouts crisis, Emam said that the loads are increasing by 8% every year. Fuel supplies to power station annually decrease by 6% in addition to an increase in maintenance and malfunctions in stations.
President Abdel Fattah Al-Sisi previously announced that Egypt needs $12bn (EGP 85bn) in investments over the next five years to solve the electricity crisis.