Having access to a dependable power supply would probably rank high on the list of priorities of the majority of entrepreneurs looking to set up a new business anywhere. Unfortunately, over the past couple of years or so, Egypt has suffered its fair share of blackouts as the country struggles to meet a growing demand for energy.
Yet, Egypt is a great country in which to do business despite the political and economic problems it’s facing at the moment. English is widely spoken within the business community and the workforce is young, educated and highly motivated.
With a population of 85 million, says the US embassy in Cairo, Egypt is an attractive market for US firms thanks to its unique mix of demographics and commercial links to the broader world, strategic location and a demonstrated ability to innovate and compete in global markets.
The country’s banking sector is modern, transparent and stable, a definite plus for any would-be investor, so there should be little problem setting up a business bank account, for example. But the banks, multinationals like HSBC and Barclays, or domestic institutions such as the National Bank of Egypt, the oldest commercial bank in the country, are not just simply providers of financial products and services. They are also purveyors of local knowledge and expertise which any investor looking for success would be unwise to ignore.
Egypt’s demand for electricity is growing rapidly and the need to develop alternative power resources is becoming ever more urgent, says leading international law firm Norton Rose. It is estimated that demand is increasing at a rate of 1,500 to 2,000MW a year, as a result of rapid urbanisation and economic growth.
The law firm says Egypt has been suffering severe power shortages and rolling blackouts over the past years, necessitating the requirement to look to alternative energy options to help meet increasing demand.
In late 2012, positive steps to kick-start the development of the renewable energy industry were taken. The Supreme Council for Energy announced exemptions from customs duty and sales taxes on parts for renewable energy systems. It was also announced that allocations of land belonging to the New and Renewable Energy Authority (NREA) would be made to private companies working in the wind and solar fields.
This year, a memorandum of understanding was signed between the NREA and the Arab Organisation for Industrialisation, an Egypt-based Arab military organisation.
The strategic partnership between the two institutions aims to increase the consumption of renewable energy in the country, to reach 20% of global energy use by 2020.
It is also hoped the agreement will foster experience sharing, competence building and the implementation of new technical tools as well as enabling the review of suggestions made on environmental and logistical matters, and to pool knowledge and practices for the management of new projects.
Norton Rose says the 20% target is expected to be met largely by scaling-up of wind power projects with the share of wind power in total electricity generation being expected to reach 12%. This translates to a wind power capacity of about 7200MW by 2020.
For more by Norton Rose, click here.