Egypt has signed a $350 million worth of financing agreements with Saudi Arabia to upgrade the former’s power grid and secure imports of petroleum products.
Egypt has been facing the worst energy crisis in decades and the government has been struggling to even supply enough gas to the power stations.
The Arab world’s most populous country has turned from a gas exporter to an importer in the recent years as it seeks to satisfy the high domestic demand. The energy crisis has been drawing political heat in the country over last few years with shortage of gas and fuel being at the centre of former President Mursi’s ouster by the army last year.
Egypt’s Oil-producing Gulf allies have come to its aid with two loan agreements worth $100 million signed on Saturday to be invested in two electricity stations to boost the capacity of the national grid. The country also expects a further $250million in the form of petroleum products.
Saudi Arabia and the UAE will be at the center of the revival of Egypt’s energy sector, the Saudi government has spent a total of $5 billion in oil aid since July 2013 with $3billion worth of oil products sent to Egypt between April and September of this year. Egypt and UAE also sealed a deal in September that commits Egypt to purchasing about 65% per cent of its needs from the UAE in the next year.
In its quest to curb public spending and fuel wastage, Egypt introduced deep cuts to energy subsidies in July which have escalated the prices to more than 70%.
