In general, renewable energy still costs a lot more than fossil fuel, but there are a few important niche markets in Egypt where significant savings could be achieved reasonably quickly, both for consumers and the government.
Wind farms and photovoltaic arrays, once up and running, cost very little, apart from maintenance and upkeep. The problem is that they require huge upfront costs that make them more expensive than traditional power, even in the long run.
It’s cheaper to build gas-powered turbines and pay for the gas throughout its lifetime, at least under current, government-subsidised prices.
In areas that are off the electricity grid, however, solar power suddenly begins to make a lot more sense. These include large areas of the country: the grid does not extend south of the port of Safaga on the Red Sea coast, nor does it go very far into the desert in the rest of the country. In these areas, hotels, mines and factories tend to generate power using their own diesel generators.
Another application where solar is beginning to have an advantage is in heating water. Solar thermal water heaters are ubiquitous in most Mediterranean countries, but not in Egypt, where the government subsidises diesel, gas, electricity and other fossil fuels, making them cheaper than solar.
Until Egypt reforms its energy pricing structure, it costs less to buy an inexpensive electric water heater and pay for electricity than to install expensive thermal panels on one’s roof, even if afterwards the hot water comes out free for the lifetime of the heater.
According to Sameh Aziz, the chief executive of Solaris Innovative Solutions, an Egyptian solar power company, heating water uses up about 6 per cent of the country’s power production.
But when the government increased diesel prices in July 2013, thermal water heating suddenly became more economical, especially for large-scale users such as hotels.
Hotels generally use diesel boilers. Mr Aziz calculates that if depreciation and other costs are factored in, it costs about 0.90 Egyptian pound (Dh0.42) per kilowatt hour equivalent to heat water in a boiler.
A typical 300-litre solar water heater, enough for three hotel rooms, costs between 10,000 and 12,000 pounds, far more than a diesel boiler.
The lifetime of a typical 10-year solar unit, which takes up about four square metres of rooftop space, is about 10 years. Maintenance costs between 2 and 3 per cent of the initial cost a year. And each solar unit needs a small backup electrical unit that adds to costs.
Still, in total, this works out to about 0.55 pounds per kilowatt hour equivalent for a solar unit, making it cheaper than a diesel boiler, says Mr Aziz. If a hotel were to convert to solar energy, the payback period would be a mere two-and-a-half years. If the government were to eliminate all energy subsidies, it would be even less – about one-and-a-half years.
Mr Aziz says there are no statistics for the amount of solar water units being installed in Egypt, but he believes it is only 1,500 to 2,000 units.
One advantage for renewable energy in Egypt is that the country’s photovoltaic (PV) power tends to be more economical than in industrial nations, partly because Egypt’s inexpensive labour lowers installation and maintenance costs, but also because the desert sunlight is bright and clouds are few.
The payback period for switching from diesel water pumping to PV pumping – pumping water is one of the country’s biggest use of off-grid power – is about five years if all costs of diesel are taken into account. They include maintenance, depreciation, the unreliability of supply and the often spotty quality of the diesel itself, says Ahmed Zahran, the chief executive of KarmSolar, an off-grid solar energy solutions company. It has outfitted 11 PV pumping stations in the Western Desert, and is working on another 23.
PV prices are falling. In 2011, the cost of one watt of installed PV power was US$1.30. It is now $0.55.
Until the price of PV falls below that of electricity produced by natural gas, which remains the cheapest method of power generation in Egypt, there is unlikely to be a major conversion.
But there are some things that the government could be doing right now to save money, including perhaps paying consumers to convert to solar. Since the government is already subsidising diesel consumers, it would make sense for it to encourage people to use a cheaper source of energy.
Patrick Werr has worked as a financial writer in Egypt for 25 years for agencies including Reuters and Bloomberg News.
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Naga
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Company%20Profile
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The specs
Engine: four-litre V6 and 3.5-litre V6 twin-turbo
Transmission: six-speed and 10-speed
Power: 271 and 409 horsepower
Torque: 385 and 650Nm
Price: from Dh229,900 to Dh355,000
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Diriyah%20project%20at%20a%20glance
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Inside%20Out%202
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The essentials
What: Emirates Airline Festival of Literature
When: Friday until March 9
Where: All main sessions are held in the InterContinental Dubai Festival City
Price: Sessions range from free entry to Dh125 tickets, with the exception of special events.
Hot Tip: If waiting for your book to be signed looks like it will be timeconsuming, ask the festival’s bookstore if they have pre-signed copies of the book you’re looking for. They should have a bunch from some of the festival’s biggest guest authors.
Information: www.emirateslitfest.com