Egypt: Head electricity regulators, reforms and transparency

The Egyptian agency for electricity regulators is facing many challenges, both on Mediterranean and regional level. These challenges include its participation in the Mediterranean association of regulators of electricity and gas (MEDREG), created in Rome in 2007. This was reported to ANSAmed by the managing director of Egyptera, Hafez el Salmawy.

The goal of the Egyptian electricity regulators is to supervise the production, generation, distribution and transmission of energy, monitor safety of supply, grant licences for the construction, management and maintenance of plants, verify the flow of investments in the sector, make sure the energy mix includes sufficient renewable sources to avoid environmental damage, prevent the formation of monopolies and inform consumers, also on aspects like energy efficiency.

One of the goals of the electricity law that is awaiting approval by the parliament, Salmawy explains, is the unbundling of state-owned transmission company, currently under the Egyptian electricity holding company, to make it more independent.

The challenges Egyptera is currently working on regard the improvement of the sector's governance, with more transparency and more public accountability, and regulations that stimulate the development of renewable energy, currently 1.5% of Egypt's energy mix. "We are also involved in the development of a new investment programme because the current programme is obsolete and too dependent on investments by the state," explains the general manager, underlining that one of the most delicate aspects is the country's subsidy system.

This system totals around 3.5 billion USD per year to support consumer prices, for private consumers in particular, in the presence of an "aggressive" growth of energy demand of 5-7% per year. The goal, he observes, is to shift these subsidies from producers to consumers, also to stimulate energy efficiency.

Egypt, Salmawy pointed out, wants to become a kind of energy hub for the Gulf states, Africa and the European Union. "The Mediterranean dimension is crucial is this question and that is why we are very active in MEDREG. It is one of our priorities, a forum meant to develop harmonised regulations and a place to exchange information." Egypt chairs one of MEDREG's four groups, the group that works on electricity. One of the added values, Salmawy explained, is the possibility to train regulators and the opportunities for capacity building. The future creation of a Mediterranean market will involve other political and financial institutions as well and requires a regional institution, but without MEDREG "this would not be possible," Salmawy concluded.