The energy sector is now a mainstay of socio-economic development processes in Egypt. This sector is mainly governed by a number of laws and regulations that may be summarized as follows:
Egyptian Ministry of Electricity and Energy:
The energy and electricity sector in Egypt is mainly regulated by the Ministry of Electricity and Energy (the “MEE”), which is organized under the provisions of the Presidential Decree No. 1103 of 1974, as amended.
In this regard, according to Article 1 of the Presidential Decree No. 1103 of 1974, the MEE is mainly responsible for the following:
Design a policy and set a general plan so as to keep pace with the scientific and technological development and supervise the implementation of this policy and monitor and follow up the various aspects of activities in the fields of electricity;
Set a tariff for the distribution and sale of electric power of various voltages for all purposes;
Supervise the study and implementation of the electricity projects of special importance;
Set statistics and data systems related to electricity in all fields; and
Regulate the provision of technical consultation, expertise and assistance to Arab countries and elsewhere in the fields of electric power.
Currently, there are six (6) authorities and a holding company that are mainly affiliated to the MEE as follows:
Egyptian Electricity Holding Company:
By virtue of the provisions of Law No. 164 of 2000 (the “EEHC Law”), the Electricity Authority of Egypt has been transformed into a private company titled ‘the Egyptian Electricity Holding Company (the “EEHC”)’. In this regard, EEHC takes the legal form of a private joint stock company wholly owned by the Egyptian State, which is governed by the Companies Law No. 159 of 1981 and the Capital Market Law No. 95 of 1992, unless otherwise provided for by the EEHC Law. In this regard, EEHC participates in following subsidiaries:
Egyptian Electricity Utility & Consumer Protection Regulatory Agency:
The Egyptian Electricity Utility and Consumer Protection Agency (the “EEUCPA”) was founded and re-organized by virtue of the recent-issued Electricity Law No. 87 of 2015 (the “Electricity Law”). According to Article 2 of the Electricity Law, EEUCPA aims at regulating, monitoring and overseeing all issues related to electric power in terms of production, transmission, distribution and consumption so as to secure its availability and continuation to provide various types of requirements and uses at the most reasonable prices and in an environment-friendly manner, taking into consideration the interests of electric power consumers as well as the interests of the power producers, transmitters and distributors referred to in this Decree as “the Electricity Utility”.
Furthermore, according to Article 8 of the Electricity Law, EEUCPA is responsible for determining all rules and conditions on which establishment, operation, management and maintenance of electricity business activities in Egypt as well as sale and distribution of electricity.
It is worth noting that according to Article 3 of the EEUCPA Law, EEUCPA has the authority to grant licenses for establishing, managing, operating, maintaining of electric power generation as well as transmission, distribution and selling thereof and, therefore is subject to the provisions of the EEUCPA Law.
New & Renewable Energy Authority:
The New & Renewable Energy Authority (“NREA”) was established by virtue of the provision of Law No. 102 of 1986 (the “NREA Law”) in a form of a public authority having the legal personality and affiliated to the Minister of Electricity & Energy.
The NREA Law has recently been amended by virtue of the provisions of Law No. 135 of 2014 (the “Amended NREA Law”) to grant NREA the authority to implement, operate and maintain any new and renewable energy production and usage projects including, inter alia, wind and solar energy projects (the “New and Renewable Projects”).
According to the Amended NREA Law, NREA has also the authority to implement, operate and maintain any New and Renewable Projects, whether solely or in participation with any person.
NREA may also procure any person to implement, operate and/or maintain any New and Renewable Project.
The Amended NREA Law allows NREA, subject to a prior approval from the Minister of Electricity and Energy, to establish joint stock companies that might by wholly by NREA or in partnership with any other private and/or public shareholder.
The new Renewable Energy Law:
On December 21, 2014, a new Law under No. 203 of 2014 has been issued in Egypt to incentivize production of electricity by using renewable energy sources (the “Law 203 of 2014”), whereby:
A tender may launched by NREA for establishing plant(s) for electricity production by using renewable energy resources, which plant(s) shall be operated by NREA, and the electricity generated by the said plant(s) shall be sold to the Egyptian Electricity Transmission Company at the prices suggested by EEUCPA based on the studies prepared by NREA and approved by the Egyptian Ministers Cabinet;
The allocation of any plot of land for renewable energy projects shall be made by way of usufruct in accordance with the regulations issued by the Egyptian Ministers Cabinet in this regard. In practice, the aforementioned allocation is usually made by virtue of a decree from the Prime Minister; and
Production and sale of the electricity that is generated by using renewable energy resources is not allowed without a prior license from EEUCPA. However, subject to the regulations issued by EEUCPA, the said license is not required for (i) the production of such electricity for private usage, or (ii) the projects that have capacity of 500 KW.