In­vest­ments in power strat­egy amount to $75bn un­til 2022

PLAN PRODUCTION PROJECTS, TRANS­MIS­SION, AND DIS­TRI­BU­TION OF ELEC­TRIC­ITY COST $45BN WE SEEK TO DI­VER­SIFY POWER SOURCES, MAX­IMISE USE OF NEW AND RE­NEW­ABLE ENERGY

The Daily News Egypt - - Business - By Mo­hamed Farag

The govern­ment com­pleted pre­par­ing the energy strat­egy and is set to im­ple­ment it start­ing next year, in co­or­di­na­tion with both the Min­istry of Pe­tro­leum and the Min­istry of Elec­tric­ity.

The to­tal in­vest­ments needed by the sec­tors of elec­tric­ity and oil un­til 2022 amount to $75bn, in­clud­ing $45bn for elec­tric­ity and $30bn for the oil sec­tor.

It was agreed to de­velop a longterm strate­gic plan that be­gins in fis­cal year (FY) 2018/2019 and ends in FY 2029/2030. This plan was based on the stud­ies of the Egyp­tian Nat­u­ral Gas Hold­ing Com­pany (EGAS) and the Egyp­tian Gen­eral Pe­tro­leum Cor­po­ra­tion (EGPC) re­gard­ing the fu­ture quan­ti­ties of pro­duced oil and gas.

Al Borsa ob­tained the de­tails of the to­tal in­vest­ments re­quired to add new elec­tric­ity production ca­pac­i­ties be­tween 2018 and 2030. The study con­ducted by SOFRECO con­sul­tancy for sus­tain­able eco­nomic and so­cial de­vel­op­ment showed that the de­vel­op­ment of the elec­tric­ity sec­tor re­quires a to­tal of $135.258bn, in­clud­ing $9.544bn in FY 2018/2019 alone. The needs in 2018/2019 in­clude $6.778bn for power plants op­er­ated by nat­u­ral gas and oil, $30m for hy­dro­elec­tric gen­er­a­tors, $2.502bn for wind farms, and $234m for so­lar power plants.

The study also showed that the elec­tric­ity sec­tor needs $10bn in FY 2019/2020 for sev­eral projects, in­clud­ing $3.365bn for coal-fired projects, $88m for nat­u­ral gas and oil projects, $8m for hy­dro­elec­tric projects, $1.833bn for wind farms, $229m for so­lar pho­to­voltaic cells projects, and $3.662bn for so­lar ther­mal power plants.

As for FY 2020/2021, the sec­tor will need a to­tal of $12.916bn, di­vided across $7.529bn for coal projects, $88m for nat­u­ral gas projects, $4m for hy­dro­elec­tric projects, $1.833bn for wind farms, $490m for so­lar pho­to­voltaic cells, and $2.972bn for ther­mal so­lar plants.

Then in FY 2021/2022, the study in­di­cated the need for in­vest­ments worth $12.781bn, in­clud­ing $7.529bn for coal power plants, $88m for nat­u­ral gas plants, $4m for hy­dro­elec­tric projects, $1.828bn for wind farms projects, $484m for so­lar pho­to­voltaic cells, and $2.848bn for ther­mal so­lar projects.

The oil sec­tor seeks to at­tract in­vest­ments of about $30bn over the next four years to de­velop the gas fields in north Alexan­dria.

Min­is­ter of Elec­tric­ity Mo­hamed Shaker told Al Borsa that the stud­ies of SOFRECO high­lighted the re­quired in­vest­ments of $38.6bn for coal projects and $36.3bn for so­lar power plants projects.

The study stated that the sec­tor needs to add ca­pac­i­ties of 51,738 MW be­tween 2018 and 2030, in­clud­ing 6,950 MW from so­lar ther­mal power and 9,020 MW from so­lar pho­to­voltaic cells.

It added that the sec­tor dur­ing that pe­riod also needs 9,350 MW from wind farms, 68 MW from hy­dro­elec­tric gen­er­a­tors, 100 MW from sim­ple-cy­cle liq­uid fuel power plants, 4,650 MW from nat­u­ral gas and oil projects, 16,800 MW from coal-fired plants, and 4,800 MW from nuclear power plants.

Shaker said that sub­sidy for elec­tric­ity will be re­duced grad­u­ally to reach 0% in 2025.

He added that the min­istry aims to di­ver­sify energy sources, ex­plain­ing that the plan in­cludes be­gin­ning to es­tab­lish clean-coal production plants in FY 2019/2020. The first unit of the Dabaa nuclear power plant will also en­ter ser­vice in FY 2023/2024 to give an out­put of 1200 MW.

Ad­di­tion­ally, SOFRECO noted that the Min­istry of Elec­tric­ity re­quires in­vest­ments of $18.895bn in 2023/2024, in­clud­ing $5.4bn for the nuclear power plant, along with $3.365bn for coal-fired projects, $88m for nat­u­ral gas power plants, $8m for hy­dro­elec­tric gen­er­a­tors, $3.615bn for wind farms, $923m for pho­to­voltaic cells, and $5.496bn for ther­mal so­lar projects.

The study showed that the in­vest­ments needed by the Min­istry of Elec­tric­ity in FY 2025/2026 will amount to $23.725, in­clud­ing $5.4bn for the nuclear power plant, $88m for nat­u­ral gas and oil power plants, $8m for hy­dro­elec­tric plants, $3.631bn for wind farms, $890 for so­lar pho­to­voltaic cells, and $5.296bn for ther­mal so­lar cells.

In 2027/2028, the in­vest­ments will reach $19.791bn, in­clud­ing $5.400bn for the nuclear power plant, $88m for nat­u­ral gas and oil projects, $8m for hy­dro­elec­tric plants, $2.874bn for wind farms, $3.056bn for so­lar pho­to­voltaic cells, and $8.545bn for ther­mal so­lar plants.

Fi­nally, in 2029/2030, the sec­tor will need in­vest­ments worth $27.377bn, in­clud­ing $5.4bn for the nuclear power plant, $8.412bn for coal projects, $88m for nat­u­ral gas and oil projects, $8m for hy­dro­elec­tric projects, $2.891bn for wind farms, $356m for pho­to­voltaic cells, and $7.522m for ther­mal power plants.

In a re­lated con­text, Min­is­ter of Pe­tro­leum Tarek El Molla said that Egypt has adopted the 2030 strat­egy to achieve a di­ver­si­fied and com­pet­i­tive econ­omy that will be based on in­no­va­tion and knowl­edge and on the foun­da­tion of fair­ness and so­cial jus­tice.

El Molla added that the min­istry’s strat­egy for 2030 is based on three main foun­da­tions: se­cur­ing do­mes­tic needs of power through self-suf­fi­ciency; sus­tain­ing production and pro­vid­ing a fer­tile en­vi­ron­ment for in­vest­ment; and draft­ing leg­is­la­tions that de­fine work­ing meth­ods in the field of energy and that fa­cil­i­tate in­vest­ment op­por­tu­ni­ties.

He noted that the Min­istry of Pe­tro­leum adopts that strat­egy be­cause energy is the fuel for eco­nomic growth.

El Molla pointed out that the oil and gas sec­tor in Egypt is full of po­ten­tial in­vest­ment op­por­tu­ni­ties across all in­dus­try phases, stress­ing that the goal is to make cer­tain the es­tab­lish­ment of a sus­tain­able in­vest­ment en­vi­ron­ment, to sup­port eco­nomic growth in Egypt, and to en­sure the oil sec­tor helps in im­prov­ing the in­vest­ment cli­mate by pro­vid­ing fi­nan­cial in­cen­tives, se­cur­ing skilled labour, and fol­low­ing rules and reg­u­la­tions that aim to achieve co­op­er­a­tion and suc­cess­ful part­ner­ships.

The min­is­ter said that the most im­por­tant re­sults in the past three years in­clude the sign­ing of 70 new agree­ments in search, ex­plo­ration, and production with ma­jor in­ter­na­tional com­pa­nies with in­vest­ment amount­ing to $15bn, along with the Zohr find—the largest field for Egypt and in the Mediter­ranean Sea. This is in ad­di­tion to at­tract­ing in­vest­ments of about $30bn ear­marked for the coming three to four years to de­velop north Alexan­dria projects.

He added that the min­istry com­pleted the two largest petro­chem­i­cal projects, lo­cated in Dami­etta and Alexan­dria, with in­vest­ments of $4bn.

He said that de­spite the chal­lenges in the sec­tor, the min­istry is fol­low­ing a clear map sup­ported by the nec­es­sary struc­tural re­forms.

El Molla also noted that the min­istry has be­gun de­vel­op­ing and up­grad­ing a pro­gramme that aims to im­ple­ment a com­pre­hen­sive scheme for oil and gas in Egypt as to achieve a more mod­ern and ef­fi­cient sec­tor.

The min­is­ter added that the plans and pro­grammes that are cur­rently be­ing im­ple­mented will bear fruit in the coming years and will con­trib­ute to achiev­ing the strate­gic goal of Egypt to be­come a lead­ing re­gional hub for oil and gas and a role model for other coun­tries in the fu­ture.

Mo­hamed Shaker, Min­is­ter of Elec­tric­ity

Tarek El Molla, Min­is­ter of Pe­tro­leum

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