Fitch expects continued growth of energy sector in Egypt during next decade: IDSC

CAIRO – 7 November 2021: Fitch Ratings expects that the energy sector in Egypt will witness continuous growth during the next decade, in light of the entry of many thermal, solar and wind energy plants into commercial operations, according to the Egyptian Cabinet's Information and Decision Support Center (IDSC).

IDSC stated, in a statement, Sunday that Egypt is likely to depend mainly on thermal energy in the current period until 2030, and the energy generated from natural gas will constitute the majority of thermal energy generated during the current time.

It pointed out that the report issued by Fitch expects the non-hydroelectric renewable energy sector to continue to attract investments during the current period until 2030, in light of the great potential in solar and wind energy, which represent attractive opportunities for investors.

"With the increase in competitiveness and the decline in equipment prices, solar and wind energy have become the cheapest sources of electricity in Egypt, which may contribute to making Egypt an important regional center for the production and export of electricity,” it added.

According to the statement, continuous investments in modernizing the energy network infrastructure, in addition to expanding public infrastructure to facilitate the production and transmission of renewable energy, will contribute to reducing energy distribution losses and strengthening energy security in Egypt, and with these developments, many investment opportunities are expected to emerge in the energy transmission and distribution sector in the coming years.”

Expectations also indicated that the energy market would be affected; given the pressure on the investment incentive, but nevertheless, export infrastructure investments and the growth of the industrial sector may boost medium-long-term demand, thus mitigating the impact of large supply on the investment incentive, and enhancing the volumes of investments expected in the current period until 2030.