Chronic underinvestment in Egypt’s power grid means a projected $5bn will have to be spent in order to prevent impending blackouts, according to a senior energy ministry official.

Reuters reports that while gas shortages have been blamed for the crisis, senior electricity ministry official Sabah Mohamed Mashaly said modernising the grid should be a priority.

“We don’t have any (capacity) reserves, we just cover the load demand,” Mashaly said in an interview.

Additional power capacity is needed to fill sudden production falls caused by accidents and maintenance work at Egypt’s 51, mainly gas-fired power plants, of which about a quarter are more than 20 years old.

Mashaly said renovating these and building new ones would carry a price tag for cash-strapped Egypt of “no less than $4 or $5 billion” plus several billion more to boost the generation capacity of the system.
Cairo, Egypt
Egypt’s ageing power infrastructure is struggling to cope with rapidly increasing demand and gas shortages have worsened in recent years as dwindling local production has failed to meet domestic demand and export commitments.

The situation threatens to come to a head in July and August, the hottest summer months.

The interim government, like its predecessors, is grasping for short-term solutions, mostly encouraging citizens to cut energy use and negotiating with friendly Gulf Arab states to import petroleum products on favourable terms.

Mashaly says private investment is needed for renovation of the grid. But she cautioned that this will not happen until the government eases the fuel subsidies, which drain more than 20 percent of the state budget. She added that the power sector should eventually be privatised, in keeping with the global trend.

Analysts told Reuters that Egypt is facing an actual shortfall of about 4000-5000 MW in July and August, when transmission and distribution losses are factored in.

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