Egypt plans to raise $2.5bn for gas imports
Cairo, May 7, 2014
Egypt wants to raise $2.5 billion to cover natural gas imports until the end of December, an energy official said on Wednesday, providing no details on how the government might raise the funding.
Khaled Abdel Badie, head of state-run Egyptian Natural Gas Holding Company (EGAS), told Reuters the funds were needed to secure supplies for power stations and cover other costs.
Egypt must import liquefied natural gas (LNG) for power generation, to cover a shortage as domestic gas production declines, a sensitive issue the new president will face.
Egypt has obtained billions of dollars in loans from other Gulf Arab states in recent months. Some of that money has been used to help Cairo fund energy costs.
Former army chief Abdel Fattah al-Sisi, who is expected to win a presidential election on May 26-27, has suggested he will take a cautious approach to Egypt's energy troubles, saying the government cannot get rid of costly subsidies overnight.
Electricity demand is highest in summer, when Egyptians keep air-conditioners running day and night. But the lack of gas has caused blackouts, even in winter this year for the first time in decades.
Energy is a politically explosive issue in the biggest Arab nation, where power cuts have become commonplace even in the capital Cairo. Blackouts deepened discontent with Islamist President Mohamed Mursi before the army ousted him last July after mass protests against his rule.
But Egypt's energy troubles predate Mursi. They are rooted in fuel subsidies. Officials have said the subsidies could cost nearly $19 billion in the next fiscal year starting in July.
The subsidies also drain foreign currency reserves. – Reuters