EGYPT RESUMES POWER CUTS BEFORE SUMMER TO SAVE FOREIGN CURRENCY
▶ The government had suspended the interruption of electricity supplies during Ramadan and Eid Al Fitr
Egyptians faced electricity shortages this week after the government resumed daily power cuts in an attempt to save money.
The interruptions, lasting up to two hours between 11am and 5pm, resumed on Monday.
The power cuts were suspended during Ramadan, which began on March 11, and the week-long Eid Al Fitr holiday that followed.
They were first introduced last summer, the hottest on record, in an attempt to preserve foreign currency reserves needed to import fuel for electricity stations, as well as essential food items and industrial materials. The power cuts resumed in November after a brief pause.
The latest interruption to electricity supplies is expected to continue in summer, when temperatures regularly soar to 40°C.
There are signs that this summer will be hotter than the last, as indicated by the unseasonably high temperatures that have reached about 35°C in the capital, Cairo.
Most Egyptians rely on electricity supplied by the state, unlike other countries in the region such as Lebanon and Iraq, where power shortages have forced residents to depend almost entirely on privately owned generators.
“It’s hard to imagine an end to power cuts, which are only likely to intensify as energy consumption peaks in the summer,” said Riccardo Fabiano, project director for North Africa at the Brussels-based International Crisis Group.
“The outlook for the summer is quite pessimistic, with a potential intensification in power cuts or other measures to limit consumption.”
The government has been compelled to resume power cuts due to a decline in foreign currency revenue from two of the North African country’s primary sources of income – tourism and transit fees from ships crossing the Suez Canal.
Both sectors have been affected by Israel’s war in Gaza.
Egypt has also noted a decrease in production from its largest offshore natural gasfield, Zohr.
President Abdel Fattah El Sisi’s administration has described the power cuts as a necessary sacrifice.
Last year, Mr El Sisi said the measures allowed the country to save $300 million a month.
With most of the country’s 106 million people struggling financially due to record inflation and a sharply devalued local currency since 2022, many are feeling the impact. Egyptians
have criticised the government’s move and claim they have been paying significantly more for power in recent years due to the gradual reduction of state subsidies.
However, the government says it continues to subsidise electricity for residential use.
Additionally, many Egyptians are dismayed at the prospect of having to endure power cuts during spring, when electricity consumption is typically lower than the peak demand months of July and August.
Some had hoped the recent injection of more than $50
billion in investment, aid and loans into the economy would significantly alleviate the foreign currency shortage that has been debilitating over the past two years.
The funds were expected to cover sufficient imports of fuel for power stations, as well as other essential commodities.
Cairo has begun purchasing liquefied natural gas earlier than usual to prevent potential disruptions during summer that could stoke public discontent, Bloomberg reported.
The purchases have been made possible by Egypt’s recent
financial bailout. The LNG purchases represent a notable change for the country, which had largely halted fuel imports in 2018 after the discovery of the Zohr gasfield.
The discovery significantly boosted domestic production, transforming Egypt into a net exporter of natural gas.
Mr El Sisi has expressed particular pride in his government’s investment in the local energy sector.
Over the past decade, Egypt has invested billions of dollars in advanced power stations, distribution networks and the
rapid expansion of clean energy generation.
A year ago, Mr El Sisi informed Egyptians that the nation’s power generation, estimated at about 48,000 megawatts, exceeded its needs by 20 per cent.
He expressed satisfaction in the country’s ability to export surplus electricity to energy-starved neighbours.
However, at the peak of summer last year, local electricity consumption rose to 34,650MW, which is uncomfortably close to the country’s total generating capacity.
The power cuts resumed on Monday and are expected to last for up to two hours each day, between 11am and 5pm