(MENAFN- Daily News Egypt) Government sources told the Daily News Egypt that the ministry of electricity paid EGP 33bn of its debts to the ministry of petroleum until the end of May, with arrears amounting to EGP 148bn.
The ministry of finance raised the capital of the Egyptian Electricity Holding Company (EEHC) by EGP 2.7bn in order to strengthen the capital base of the company to improve the sustainability and financial structure and the financial value of the company.
The sources added that the budget of the EEHC after its capital increase reached EGP 29.3bn and the ministry of finance continues to support the electricity sector to continue to improve the quality of electricity supply to all consumers as well as reduce debt and improve the financing structure.
The sources pointed out that the ministry of finance will bear part of the debt owed by the electricity sector in favour of some creditors such as National Investment Bank and the ministry of petroleum and mineral resources.
The finance ministry is also committed to pay the total value of the electricity bill owed by the state agencies, which is approved quarterly by the Central Auditing Organization. This is followed by a disbursement by the ministry of finance, while the unpaid part of the electricity bill is charged to the ministry of finance for the ministry of electricity.
The Minister of Electricity and Renewable Energy, Mohammad Shaker, said in previous remarks during the press conference to announce the electricity prices to be applied in the next fiscal year(FY), that the ministry of finance has agreed to increase the capital of the EEHC.
He pointed out that this cooperation is a continuation of the efforts exerted by the ministry of finance during the past years to bear part of the financial burdens due to the EEHC in order to consolidate the efforts of the overall development of the sector.
He added that the total deficit of the state budget in the event of not increasing electricity prices in the coming FY will reach EGP 33.5bn.
The ministry of electricity aims to increase the prices of electricity in July to reduce the subsidies and ease the financial burden on the state and pay its debts to the ministry of petroleum in light of the government's plan to remove all subsidies for electricity by 2021/22.
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