Egypt Woos Investors for Coal-Fired Power Plants

Egypt is in talks with several big investors about building coal-fired power plants as it works to diversify its sources of generation amid the country's worst energy crisis in decades, the electricity minister said on Tuesday.

Mohamed Shaker told a visiting delegation of American business executives that expanding the use of both coal and renewables such as wind and solar was key to the government's effort to end power cuts that regularly hit homes and shut down production lines last summer.

The cash-strapped government is emphasizing the need to attract private investment in the creaking power sector, which requires at least $5 billion worth of improvements according to Egyptian industry officials.

Shaker said the talks with investors have been underway for the past three to four months and "were going very well".

Egypt's cabinet approved the use of coal for industrial power generation in April. The country's major cement producers have begun retrofitting their plants to run on imported coal and have been seeking import permits.

Two coal-fired power plant projects have already been announced. An Abu Dhabi-based private firm leading a consortium said in September it would build Egypt's first coal-fired power plant, and last week Egypt's Orascom Construction revealed plans to build another plant in a joint venture with Abu Dhabi's International Petroleum Investment Co (IPIC).

Shaker said the government wanted to cut its reliance on natural gas and fuel oil for power generation from an unsustainable 90 percent to 62 percent by fiscal year 2020/21.

Oil Minister Sherif Ismail, speaking at the same event, said Egypt's supply- demand gap stood at 700 million cubic feet of natural gas daily and 10 million tonnes of petroleum yearly.

Reporting By Maggie Fick