Egypt Opens the Grid: The 2025 Rollout of Private-to-Private Electricity Contracts and What It Means for Energy Investors

Egypt's electricity market took a decisive legal turn in 2025. For the first time, the regulator approved a pilot batch of private-to-private contracts that allow privately financed renewable generators to sell power directly to large industrial consumers, using the national transmission grid rather than selling exclusively into the state-controlled off-taker. This is a structural departure from the single-buyer model that has long defined the Egyptian power sector, and it reshapes the legal landscape for developers, lenders, and energy-intensive consumers.

The framework rests on Electricity Law No. 87 of 2015, which set Egypt on the path toward market liberalisation but left the competitive market largely unimplemented for years. The operative trade and settlement rules for private-to-private schemes were issued by the Egyptian Electric Utility and Consumer Protection Regulatory Agency, known as EgyptERA, and developed with technical support from the European Bank for Reconstruction and Development. In June 2025 the first four projects were approved under the pilot, with a combined capacity of four hundred megawatts. KarmSolar is developing a one hundred megawatt solar plant to supply Suez Steel. AMEA Power is building a one hundred megawatt solar facility for the BEFAR Group and the Suez Canal Container Terminal. TAQA PV is installing one hundred megawatts of hybrid solar and wind capacity for Ezz Steel. Enara is developing a one hundred megawatt hybrid plant serving El Alamein Silicone Products and Helwan Fertilisers. Every project is privately financed and constructed, which is precisely the policy objective: expanding clean generation capacity without drawing on state-funded contracts.

The legal architecture imposes clear boundaries that counsel must map for any client considering participation. The overall capacity of the private-to-private scheme is capped at five hundred megawatts, and registration is restricted to renewable facilities relying on wind or solar with a maximum capacity of one hundred megawatts each. Producers must hold a valid production licence for plants connected to the transmission grid, must demonstrate the financial stability to finance new installations, and must supply technical details on location, capacity, and technology. A qualified producer may contract with up to three qualified consumers. Consumers face their own eligibility tests: they must be newly established consumption sites connected to the transmission grid, must not themselves be engaged in electricity distribution, and must have no payments overdue by more than three months to the Egyptian Electricity Transmission Company or other entities in the electricity system.

The documentary regime is demanding and should be central to any transaction plan. Registration with EgyptERA requires a defined package, including application forms, production licences, financial records, and a non-objection declaration from the transmission company. The grid is accessed through the transmission operator under separate interconnection and network use arrangements, with surplus and deficit volumes settled through designated agreements. In practice, this means a private-to-private deal is not a simple bilateral power purchase agreement. It is a layered structure that sits on top of grid access, balancing, and settlement arrangements with the state transmission entity, and the allocation of grid-related risk and cost between generator and consumer becomes a core negotiating point.

For legal advisers, several issues deserve early attention. Bankability comes first. Lenders financing these projects will scrutinise the enforceability of the direct supply contract, the stability of the regulatory regime, the treatment of surplus and deficit energy, and the consequences if a consumer loses eligibility or falls into arrears with the transmission company. Step-in rights, change-in-law protection, and termination compensation all need careful drafting against a young framework with limited precedent. Second, corporate structuring matters: developers will typically house each project in a dedicated company, and the interaction between that vehicle, its production licence, and its grid agreements must be coherent. Third, the pilot character of the programme means the rules may evolve, so contracts should anticipate regulatory amendment rather than assume permanence.

The private-to-private opening sits alongside Egypt's broader push to attract energy investment through dedicated legislation, including a green hydrogen incentives regime that offers single-window approvals and substantial benefits for qualifying projects. Through 2025 that programme continued to attract developer interest while encountering real financing headwinds, with borrowing costs far above OECD levels eroding project competitiveness. It is a reminder that generous statutory incentives do not by themselves make projects bankable. The private-to-private framework addresses a different lever, namely market access and the right to sell directly to a creditworthy industrial buyer, which is often the more decisive factor for a renewable developer.

The regional contrast is instructive. The United Arab Emirates has paired its energy ambitions with a maturing corporate tax framework, and Ministerial Decision No. 229 of 2025 expanded the qualifying commodities recognised under that regime to include energy and environmental commodities such as carbon credits and renewable energy certificates. For clients active in both jurisdictions the lesson is consistent. Egypt's 2025 reforms create real opportunity to contract directly for clean power, but capturing it depends on disciplined licensing, careful contract architecture, and a clear-eyed assessment of a regulatory regime that is still finding its feet.