Arab Finance: The government has set a plan to halt daily power cuts under the electricity load reduction scheme before the end of 2024, Minister of Electricity and Renewable Energy Mohamed Shaker told Arab Finance.

As general secondary certificate exams approach, Shaker stated that the government “would not cut electricity and would take into account the exam dates to ensure students are not affected by the load reduction plan.”

Minister of Finance Mohamed Maait recently commented on the financial challenges facing the electricity and petroleum sectors in Egypt, explaining that the relation between both sectors is becoming more intricate due to the need to import petroleum products to run power stations.

Maait also noted that an additional funding of up to $300 million per month is needed to stop the two-hour daily power outage, given the recent global challenges, such as the increase in oil prices and exchange rate fluctuations.

In addition, Maait mentioned the noticeable increase in local electricity consumption, particularly in the summer, which puts further financial strain on both sectors.

Shaker went on to say that exchange rate fluctuations weighed on the two sectors in terms of costs, as the state’s financial burden is growing with increased consumption and rising petroleum product prices.

Despite the need for significant funding, the government is trying to figure out solutions, Shaker said, noting that the petroleum sector imports around 170 million barrels annually at significantly varied prices.

According to the minister, there are two sides to the dilemma; the first involves electricity budget deficit estimated at EGP 130 billion, and the second one pertains the public treasury bearing the price spreads of natural gas supplied for power generation.

Furthermore, the electricity sector was significantly affected by fluctuations in exchange rates, despite the hedging policies for oil pricing.

It is worth noting that power cuts are set to be carried out across Egypt between 11:00 am and 5:00 pm for two hours.

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