Egypt to remove electricity subsidies in 2022

12 July 2017

Electricity minister says all subsidies on electricity will be abolished in five years

Egypt is planning to remove all subsidies on electricity in 2022, according to the Electricity Minister Mohammed Shaker.

Shaker told local press that despite a reduction in subsidies since 2015, the government has budgeted it will provide EGP52.7bn ($2.94bn) in subsidies for electricity in the current financial year. It is seeking to reduce this to EGP43.3bn in 2018/2019, to EGP31.8bn in 2019/2020 and then half it to EGP16.5bn in 2020/21. The government is targeting cross-subsidisation of only EGP5.6bn in 2021/2022.

The announcement that subsidies would be abolished in 2022 comes days after it was revealed that household electricity prices in Egypt would increase between 18 and 42 per cent in the financial year 2017/2018, depending on usage rate.

Following numerous blackouts in 2013 and 2014 during peak periods, in July 2014 Cairo first announced it would be reducing subsidies increasing electricity tariffs for residential, commercial and industrial customers. In addition to tackling demand usage, Cairo moved forward with an aggressive programme of capacity building, with a fast-track programme in 2015 being followed by a deal with Germany’s Siemens to construct three power plants with a total capacity of 14.4GW.




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