Egypt Energy

A $9bn deal inked in Egypt will give a substantial boost to the country's electricity generation capacity, helping the government address power shortages and support a growing population and economy.  

Garnering more investment, loans and assistance packages than had been widely expected, Egypt’s Economic Development Conference (EEDC) secured investment contracts worth $36.2bn, an additional $18.6bn in infrastructure contracts to set up power plants, and $5.2bn in loans from international financial institutions.

Egypt has been making impressive progress in straightening up its balance sheet in recent months. Steep cuts in energy subsidies coupled with a drop in world oil prices have given the Middle East’s most populous country some fiscal breathing space, following three years of increasing budget deficits, mounting debt and reduced foreign currency reserves. 

With its significant reserves of liquefied natural gas (LNG), Egypt has been a key exporter for regional consumers over the past decade but with growing domestic consumption and a number of fiscal constraints, the country has been looking to secure additional supplies by expanding LNG capacity.

The start of production at a concession in Egypt’s Nile Delta basin by a German firm has come as welcome news, an indication of the sizable potential offered by the country’s offshore blocks. With local consumption growing, the North African state is looking to balance the need to expand output to meet domestic gas demand while at the same time fulfilling its long-term external commitments.

A range of gas exploration tenders should bring Egypt billions of dollars in investment this year and help the country meet its pressing long-term energy needs.