Last week, President Hakainde Hichilema travelled to Egypt on a State visit. The State visit included high-level discussions on trade, investment, and development cooperation between Zambia and Egypt.
As reported by the Zambia Daily Mail dated 25th February 2025, 9 Memorandum of Understanding were signed including in the field of Agriculture.
Indeed, Zambia has a lot to learn from Egypt not just in agriculture research, mechanisation and water harvesting but also in Energy.
The Egypt State visit like the Japan trip offered significant lessons for Zambia in the energy space. According to the World Bank data, Egypt reached 100% electrification in 2022 meaning the entire population has access to electricity. On the other hand, Zambia is still grappling with poor electricity access hovering around a national average of 40% electrification rate.
How did Egypt manage to reach 100% electrification rate including in villages? How did Egypt manage to install 59.5 Giga Watts (GW) of electricity capacity by 2021 while Zambia is at 3.7GW?
According to a report on Statista.com titled “Distribution of electricity consumption in Egypt by 2022,” households were the largest electricity consumer in Egypt. As of April 2022, electricity consumed by individuals in their homes represented 37.6 percent of the consumed electricity in the country.
The industrial sector followed, with a share of almost 30.4 percent. Furthermore, public utilities and governmental agencies were the third largest electricity consuming sector in the country. This shows that the household category if well harnessed has potential to contribute significantly to electricity uptake subject to demographic perspectives.
When contrasted with Zambia, a bigger portion of national electricity consumption goes to the industry and not residential. As earlier stated, national average electrification is circa 40% implying that there is a huge internal market which awaits to be exploited.
This challenge must be dealt with. There is a correlation between the quality of life and access to electricity no wonder the UN Sustainable Development Goal (SDG) Number 7 calls for universal access to clean, affordable and sustainable energy for all by the year 2030.
Reports indicate that at least 8 SDGs depend on SDG 7 on universal access to clean energy.
While Zambia adopted a 5-year plan from 2022 to 2027 to abolish the electricity subsidies following the recommendations made by the Electricity Cost of Service Study which was commissioned by the Energy Regulation Board (ERB), Egypt adopted a 4-year plan to remove the remaining electricity subsidies.
There has been sentiment that the subsidy removal programme is influenced by the IMF bailout framework.
According to a Transnational Institute 2023 report (tni.org) titled “Egypt: A tale of Class War and Greenwashing,” the IMF has been pivotal in shaping economic policy in Egypt over recent years with Egypt currently the largest borrower from the IMF second only to Argentina.
Like Egypt, Zambia is also on an IMF programme. It is important to learn from Egypt how it is navigating the removal of subsidies in the energy sector given that the subsidy removal target has potentially become a moving target.
Egypt does not have a well-balanced energy portfolio just like Zambia. According to Industry reports Egypt generates at least 80% of electricity from one source of energy- fossil fuel with the rest coming from hydro and renewable energy while Zambia’s generation mix is at least 80% hydro. Like Zambia, Egypt has embarked on energy sector reforms to manage the risk exposure to one dominant source of energy.
As correctly reported by the International Energy Agency (IEA), Egypt has initiated a number of energy sector reforms, gradually reducing electricity subsidies and introducing feed-in tariffs to promote renewable energy production.
The energy sector reforms recently initiated by the country have resulted in a significant increase in investments which have boosted electricity production over the last 5 years and ensured a stable supply across the country.
Egypt also has plans to increase the share of renewables in the electricity mix to 42% by 2035.
While researching the Egyptian electricity market, I discovered that the customer categorisation is divided into 7 categories starting from those who consume up to 50 units as first category up to 6th category of those who consume between 651 units to 1000 units while those consuming above 1000 units are in category 7. Egypt has a well segmented customer category framework for pricing management perspectives. We can learn something from them.
While Zesco has expanded its customer categories, there is still need to re-segment some categories especially above 500 units.
It can be argued that it is not fair to be paying K6 per unit at 500 units same as someone consuming 1000 units. This space after 500 units needs attention from a retail pricing category point of view. In conclusion, the trip to Egypt was a significant trip and if practical steps can be taken, it will yield dividends for Zambia.
With an installed electricity capacity of 59.6GW while Zambia is at 3.7 GW, Egypt is an African power house which will play pivotal role in electricity trade in the COMESA region.
Dr. Johnstone Chikwanda is an Energy Expert, Consultant, Author, and a Fellow of the Engineering Institute of Zambia (EIZ), Email: j_chikwanda@yahoo.com
