Back to the complete issue
Tuesday, 8 November 2016

EGP float raises Electricity Ministry’s expenses EGP 100 bn

The float and rising interest rates may have increased the Electricity Ministry’s expenses by a whopping EGP 100 bn per annum, ministry sources tell Al Borsa. EGP 50 bn of this increase will come from the rising costs to import fuel and gas for power plants. Debt service will rise to EGP 40 bn (the sources don’t explain by how much), while the costs of the three Siemens combined-cycle power plants will rise by EGP 30 bn.

Meanwhile, President Abdel Fattah El Sisi instructed Power Minister Mohamed Shaker to make sure that the float won’t result in rising electricity prices for consumers, Al Shorouk reports, something Shaker promised on Sunday. Prices, however, will go up next fiscal year which begins in July, as part of the ministry’s five-year plan to cut power subsidies for anyone but lower tier consumers, ministry spokesman Ayman Hamza confirmed. The ministry is looking to cut subsidies on electricity by EGP 14.7 bn next year, almost half of this year’s EGP 30 bn bill, government sources tell Al Borsa.

Voting with their wallets: The pledge of no price rise before next summer comes as the Electricity Ministry has reportedly found 20% of consumers have not paid their October bill, with many openly refusing because inflation is eating into their wallets. Campaigns have sprung up calling on people to stop paying their power bills, according to Al Borsa.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.