Egypt is currently facing a large transition in the energy sector, with the aim to produce cleaner and affordable energy for everyone. Egypt is also aiming to be an energy hub in MENA region. The discovery of Zohr in 2015, what is expected to be the largest gas reserve in the Mediterranean area, and its operation 28 months later are a significant opportunity for the North African giant. With around 850 billion m3 of gas produced every day, Zohr can meet a large proportion of the energy needs of Egypt’s domestic market.
Natural gas is a cheaper and more eco-friendly solution than the Liquefied Petroleum Gas (LPG) that has been used in order to meet households’ consumption requirements. Many Egyptians are still using LPG bottles in deprived areas. The national Gas Holding Company (EGAS) is assigned to address this issue, with support from AFD, the European Union and World Bank, by launching an ambitious program to connect over two million homes.
A pharaonic project
Egypt is the world’s 14th most populous country, with 96 million inhabitants. This demographic weight has an impact on energy demand, which will automatically increase as a result of a population growth of around 2%.
The extensive national plan implemented by Egypt should cover up to 2.3 million households and provide an energy that is physically and financially more accessible to the poorest populations. AFD is supporting this commitment of the Egyptian Ministry of Petroleum and Mineral Resources via a EUR 70M loan to EGAS. The European Union and World Bank are also involved, with a Grant Delegation of EUR 68M from the EU to AFD, and a USD 300M loan from the World Bank.
The project led by EGAS, for a total amount of EUR 1.7BN USD, will benefit to Local Distribution Companies and the population. The citizens living in the poorest areas will also benefit from financial support to access the connection.
A Component of the project is also aiming at assisting EGAS in having a better planning, financial and human management. At last, the recently created Gas Regulator, which was launched following an ambitious gas reform, is being supported by Technical Assistance under the project.
This publication is the sole responsibility of AFD and does not engage the responsibility of the European Union.