The Egyptian Ministry of Electricity presented a memorandum to the Cabinet asking to increase allocations after the EGP devaluation, reported Daily News Egypt.

The memorandum explained the financial burdens on the ministry as it included a study of the economic effects of the subsidy value with the increase USD exchange rate and the inflation of fuel prices, as well as the value-added tax (VAT), and banks’ lending prices.

Sources at the Ministry stated that the memorandum added that the kilowatt production cost per hour ranges have reached between EGP 0.9 and EGP 1, after the EGP devaluation and increase in oil prices. Therefore, subsidies’ allocated budget will increase to more than EGP 60b which is more than the authorized subsidy in the current fiscal year by EGP 35b. The ministry’s financial loads include EGP 40b in annual loans repaid by the Egyptian Electricity Holding Company that resulted because of the dollar price’s difference as the company borrows money according to the budget agreed upon before the pound’s devaluation which was based on the old USD price at EGP 9 per $1.

The Egyptian Electricity Holding Company and the Egyptian Electric Utility and Consumer Protection Regulatory Agency calculated the influence of variables on the cost of the production through computer programs, and prepared a number of scenarios and proposals for increasing periods of electricity subsidies.