Cairo has introduced waste to international and local companies working to produce electricity from it as a new investment opportunity.
Egyptian Prime Minister Mostafa Madbouli issued a new tariff at around 8 cents per kilowatt of energy to buy electricity generated from waste. For three years, investors have been asking for this tariff.
Cairo had concentrated on investing in solar power generation and ignored waste capacity, although the experiences of other countries indicated that waste might be a golden opportunity for Cairo.
The Egyptian Environmental Affairs Agency measured Egypt’s waste production at around 96 million tons per year, and the World Bank said Egypt is wasting 1.5% of its GDP— $5.7 billion per year— by not processing and using its waste; this is in addition to the cost of struggling with waste and its environmental impact.
Egyptian officials said they planned to increase the share of waste and renewable electricity generated by 2050 to about 55% of the country’s total energy production. Through allowing the private sector to invest in ten dedicated power plants, the Ministry of Electricity announced its intention to use waste in electricity production.
The Ministry of Environment, in collaboration with the National Bank of Egypt, the Bank of Egypt, the National Investment Bank and the Maadi Company for Engineering Industries associated with the Ministry of Military Production, formed the first Egyptian joint-stock company for waste management. It is expected that the new company will play a key role in waste processing and ensuring a continuous supply of processed waste to power plants so that they will not have to deal with informal waste collection companies.
Egypt has about 1,500 garbage collection firms operating outside the formal economy and providing jobs to over 360,000 citizens, who often work under inhuman conditions.
Former Environment Minister Khaled Fahmy said Egypt requires around $400 million in investment “to get rid of the waste pressure on the country’s economy.” Reports from the Electricity Ministry said electricity generated from waste would be linked to the medium voltage network, allowing projects with a capacity of no less than 1 megawatt. A ton of waste will yield 450-550 kilowatt-hours of electricity, based on the equipment used in the production process.
Given this investment opportunity that would enable the government to secure waste disposal in Egypt and increase foreign investment, the amount of waste produced in Egypt far outweighs the efforts and ability of the government to deal with it.