|Jul 2015||56||Business Monitor International||ASDR-209089|
Our View: We have long highlighted Egypt’s desperate need for increased power infrastructure, with
surging demand and lacklustre investment portending a significant energy crisis. Recent blackouts have
made these problems more urgent, and the government has taken some steps to improve the situation over
the past few months, aided by the recent dip in international energy prices. However, with the political
situation still in a state of flux and the economic outlook uncertain, Egypt’s ability to channel investment
towards the sector is likely to remain limited in the medium term, and the sector will continue to face large
challenges in the years ahead.
Egypt’s power sector is enduring an exceptionally challenging period. Persistently high demand for energy,
driven in part by the country’s generous regime of energy subsidies, has weighed heavily on Egypt’s ageing
electricity infrastructure, which has struggled to keep pace with a growing need for energy. Exacerbated by
deliberate attacks on infrastructure by militants, this has led to regular blackouts across the country, and has
forced the government to implement cutbacks in the provision of power.