Egypt braces for second summer of power cuts as gas supplies dwindle

Among the bustling workshops of central Cairo’s Al-Sabtiyah district, Om Ghada’s blacksmith business has seen profits dip, as two-hour power cuts each day returned after a brief suspension during the holy month of Ramadan, Reuters reports.

When scheduled outages began last summer it came as a shock to Egyptians accustomed to years of reliable power supplies under President Abdel Fattah Al-Sisi, and the government promised they would be temporary.

But supplies of the natural gas that helped generate an electricity surplus are dwindling and the power cuts are back.

The outages “create a lot of obstacles and cut into my profit,” said Om Ghada, as sparks flew from a metal cutter nearby. She owns the workshop, which is among dozens in the area that rely on electricity to power machines.

“One customer yesterday waited two hours, until they became impatient and left,” she said.

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While Egypt recently secured record investments from the United Arab Emirates and an expanded IMF programme, easing a foreign currency crisis, power cuts are a reminder of underlying economic challenges.

The cuts started as Egypt allocated more of its gas production for export to raise scarce dollars, importing polluting fuel oil to keep some power stations running. The government initially blamed them on high temperatures, but they continued through 2023 after summer ended, even after the government paused exports to meet demand.

Egypt has been seeking a role as a regional energy exporter, eyeing electricity sales to countries including Saudi Arabia and Libya, planning an interconnector to Greece, and shipping Liquefied Natural Gas (LNG) cargoes from two liquefaction plants.

But development of renewables has been halting and gas supplies are in doubt because of a lack of large discoveries since the giant Zohr field in 2015. That pushed gas production in 2023 to its lowest level since 2017, and the government recently started importing LNG cargoes.

Officials have blamed power cuts on rising demand from a growing population of 106 million, mega-projects backed by Sisi and urban development.

Cuts to electricity subsidies have been slowed as the economy came under pressure in recent years.

Egypt’s Electricity Ministry did not immediately respond to a request for comment.

Sales down

The power cuts were suspended over Ramadan and the Eid holiday that followed, and local media said they would also be halted for Labour Day and spring holidays going over this weekend. But they are sometimes hard to predict and are hurting small businesses that play a crucial role in an economy where growth has slowed and is expected to ease to 2.8 per cent in the current financial year ending in June, from above 4 per cent last year.

Ahmed Hussein, an air conditioning technician in Al-Sabtiyah, said daytime power cuts reduced productivity by 40 per cent. South of central Cairo in the Sayeda Zeinab neighbourhood, Essam said sales at the dessert shop where he works were down 30 per cent since the regular power cuts began.

“As long as there’s no electricity there are no sales. The safe and the till aren’t working,” Essam, who didn’t give his last name, said. “Customers can’t see anything.”

Sales of generators are up, but many can’t afford them.

The cuts have drawn ire on social media, where some have complained about being stuck in elevators, or unable to use them, and others have bemoaned the lack of air conditioning in hotter areas in southern Egypt.

At the launch of a state-run cloud computing data centre this week, Sisi encouraged citizens to focus on developing sectors like information technology, saying “this needs brains, not a factory or anything else.”

But as one social media post quipped in response: “This needs electricity and unlimited internet.”

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