A brutal heat wave tormenting Egypt since mid-July, resulting in lengthy and repeated power cuts, has turned into a political liability for President Abdel-Fattah el-Sisi ahead of his expected campaign to run for a third, six-year term early next year.
Since taking office nine years ago, he has pointed to the rebuilding of the country’s infrastructure — in particular, improving its decaying power grid — as one of his key achievements. The upgrades will not only allow Egypt to cover its own needs but also to export surplus electricity to neighboring countries. For example, in 2015, the Egyptian government signed a lucrative deal worth $9 billion with Germany’s Siemens to build three natural gas-fired power stations and 12 wind farms. At least one of these three German-built gas plants is now up for sale in the government’s privatization program, aimed at providing much-needed hard currency amid mounting external debt of close to $170 billion. Another expensive contract, for $25 billion, was signed with Russia to build Egypt’s first nuclear power plant at el-Dabaa, on the Egyptian north coast.
The government also spent billions to develop and increase natural gas production with the aim of turning Egypt into a gas energy hub — not only producing this resource itself but also re-exporting volumes it receives from neighboring countries, such as Israel, as liquefied natural gas (LNG) using its coastal liquefaction plants. As the host of last year’s United Nations Climate Change Conference (27th Conference of the Parties, COP27), Egypt announced that it had reached many promising deals, worth billions of dollars, to increase the domestic production of clean energy and green hydrogen, leading many Egyptians to believe they would not have to face power shortages again.
The mystery of power cuts
Those same Egyptians were consequently puzzled when they started to experience regular blackouts in mid-July. Following the classic authoritarian playbook — always give the public the impression that everything is under control — government officials first sought to minimize the crisis by saying it would end soon, perhaps in a week. However, as time passed and daily temperatures continued climbing to 40°C and above, Egypt’s Prime Minister Mostafa Madbouly held a news conference on July 27 to deliver bad news. He announced that power cuts were unavoidable in light of what he described as the world’s worst heatwave and that they were likely to last not just until the end of July but perhaps well into mid-September.
As on previous occasions, Madbouly referred to external factors to explain Egypt’s domestic problems. This time, he blamed climate change, diverting Egyptians’ attention to nearby countries, such as Greece and Tunisia, that have suffered wildfires due to the unprecedented rise in temperatures. Moreover, he announced several measures to reduce electricity consumption, such as asking government employees to work only four days from their offices instead of five, holding popular soccer games before sunset, and dimming streetlights.
Egypt faced a huge drop in foreign currency liquidity after full-scale war broke out between Russia and Ukraine in February 2022, especially following the exit of more than $20 billion in so-called hot capital. As a result, Egypt resorted to a series of devaluations of its local currency and hiked interest rates by over 11% in one year. This has led to soaring inflation and complaints among Egyptians that they cannot make ends meet because of increasing prices of all commodities. Incidentally, exactly one year ago, the government had announced a plan to reduce electricity consumption, which included the dimming of streetlights in public areas, with the aim of saving more gas for exports in hard currency.
Reduction of gas production
At his news conference, Prime Minister Madbouly denied that the current power failures were due to shortages in Egypt’s gas production, claiming that the high temperatures increased pressure on power stations, which use a mix of gas and heavy fuel known as mazut. He added that the government would soon work on importing more fuel, worth $250 million-300 million, to feed the plants and limit power cuts.
However, such claims contradicted earlier reports confirming that Egypt had, in fact, already reduced its gas production. Fitch Solutions recently revised down its forecast for Egypt’s gas production in 2023, from 1.0% year-over-year (y-o-y) growth to a decline of 4.0% y-o-y. The report notes, “[T]his will see the country’s annual gas output fall to a new three-year low of 64.9bcm [billion cubic meters].”
According to Fitch Solutions, “Egypt’s gas production in the first four months of 2023 has declined by 8.1% y-o-y. This has been driven mainly by ongoing water infiltration issues at the country’s mega Zohr field, which according to media reports has seen output at the field drop approximately one third below its 28bcm/y nameplate capacity.”
This obvious decline was among the key reasons behind Egypt’s decision to suspend gas exports starting in June in order to meet local demand. Thus, the harsh reality, which the government does not want to admit publicly, is that it is finding it exceedingly difficulty to provide the necessary hard currency to import the fuel needed to keep Egyptian power plants running.
Such an admission would open the door to more intense criticism of Sisi’s economic policies over the past decade, namely borrowing heavily to fund national “mega-projects” that few Egyptians see as a priority. Egypt’s external debt reached $165.4 billion in March 2023, compared to nearly $40 billion when Sisi took office, in June 2014. Some prominent examples of these projects include the building of the New Administrative Capital or the dozens of new bridges and highways located in the middle of the desert, away from heavily populated cities.
Confusing instructions and an unfair schedule
The Ministry of Electricity and Energy has also provided very confusing instructions on when to expect blackouts, asking residents of apartment buildings to avoid using the elevators 10 minutes before and 10 minutes after the top of each hour. This led to bitter jokes and sarcasm from Egyptians on social media, recounting how they organize their daily lives on the basis of power cut schedules released by the government.
There were also resentful complaints about the unfairness of those electricity use schedules, which the government tried to placate by dubbing the collective effort as a “national load reduction plan.” Nonetheless, while affluent neighborhoods have rarely suffered blackouts, residents of more heavily populated poor areas routinely sit in the dark for hours. The situation is much worse in cities and villages outside Cairo, where electricity cuts can last up to six hours. Meanwhile, coastal towns where affluent Egyptians spend most of their summer, as well as touristic cities on the Red Sea, have been given an exemption from power cuts.
Facing this criticism at his press conference in late July, Prime Minister Madbouly said this was a necessary measure because cities and towns popular among tourists and those spending their holidays in Egypt were an important source of much-needed hard currency. He did pledge to produce a daily schedule on the distribution of power cuts — however, with their skeptical attitude toward the government, few Egyptians bother to check those complicated timetables, continuing to expect power cuts at any time.
A reminder of the Brotherhood’s “dark” days
The real embarrassment for Sisi’s government stems from its official propaganda, in which the improvement in electricity provision to households and factories in the country of 105 million is regularly compared to living conditions in 2013.
On June 30 of that chaotic year, the since-deceased Mohamed Morsi, Muslim Brotherhood leader and president, was forcibly removed by the Army, led by then-Defense Minister Sisi, following mass demonstrations against the head of state. Nearly all vital basic services were lacking when Morsi was president, not just electricity. Egyptians lived in the dark for many hours a day and would line up for miles to procure gasoline and cooking gas cylinders, amidst shortages in basic commodities. This increased public anger and calls to end to the Brotherhood’s rule.
In comparison, Egyptians have been allowed little to no space to protest the government’s policies since Sisi took office. Public demonstrations are practically banned, and those who post sharply critical comments on social media or express dissatisfaction with the government in media interviews can easily face arrest and imprisonment for lengthy periods without trial. Thousands of political prisoners continue to be held in jail, even though the government has gradually begun releasing small numbers, especially after the May 3 launch of the “National Dialogue” with opposition parties.
There couldn’t have a worse launch for Sisi’s re-election campaign than the current rolling blackouts affecting millions. The availability of electricity in Egyptians’ homes has become a political issue, prompting critical discussions about Sisi’s spending priorities over the past nine years. Making matters worse is the lack of transparency and failure to inform Egyptians of the real reasons behind the recent power cuts, not to mention the current state of the economy. Together, this approach by the leadership has only added to the confusion and anger felt by the majority of poor Egyptians.
Source: Middle East Institute