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2/29/2016 12:00:00 AM

Egypt is studying new energy pricing structures to facilitate private sector investment in power projects worth $70 billion that are expected to be carriedout in the next six years, a government advisor said.Sherif Atifa, advisor to the investment ministry, told Zawya that Egypt hopes to attract investment of $24 billion in the planned power projects that aim toresolve frequent electricity shortages and support economic development in the Arab world's most populous country.

Egypt needs to increase its average power production by 5.2 gigawatts (GW) per year by 2022 to keep up with demand. The country's energy mix is largelydependent on oil and gas at 91%, with hydroelectric power providing just 8%, according to data from the Ministry of Electricity and Renewable Energy.Last year, the electricity ministry said 24 agreements and memorandums of understanding (MOU) for energy projects worth around $70 billion had been signedat an investment conference in Sharm El Sheikh, including projects for electricity generation, transmission lines, power plant expansions and renewableenergy projects utilising solar, wind and coal.In 2014, Egypt said it plans to gradually reform the country's energy subsidy policies and that energy prices would be fully liberalised by 2019 under afive-year plan to cover much-needed capacity expansions at power plants. The 2015-2016 state budget has allocated $3 billion in energy subsidies.The reform plan includes an increase in electricity prices, except on residential consumers using less than 200 kilowatt per hour a month, as tariffs havebeen frozen for this category to protect households with low income.Gas shortages and ageing state-run infrastructure have led to frequent power outages in Egypt, especially during the summer months when demand is high andelectric grids are overloaded by more than 3,000 megawatt (MW), according to the electricity ministry.Last September, Minister of Electricity and Renewable Energy Mohamed Shaker told Daily News Egypt that the country planned to add 14,400 MW to the nationalgrid within two years through three new power plants under an agreement with German industrial company Siemens. The minister was quoted as saying that theprojects represent around 40% of total capacity of the electricity grid.In June 2015, Siemens signed a $9 billion agreement with Egypt to supply gas and wind power plants to boost the country's electricity generation by 50%.

The order includes 12 wind farms in the Gulf of Suez and West Nile areas, comprising about 600 wind turbines and an installed capacity of 2 GW.Government advisor Atifa said that Egypt hoped to increase the contribution of renewables in the energy mix to 20% by 2022 from 8-9% now. He said thattotal investments in renewable energy projects currently being implemented stand at more than $13 billion.