Could Shams Masr help solve our energy challenges?
Shams Misr initiative leans on concessional finance to drive a solar boom: Egypt could accelerate solar adoption and achieve immediate fiscal savings if the state backs initiatives to deploy distributed solar systems across homes, factories, commercial sites, farms, and off-grid areas. This is the premise of the Shams Misr initiative put forward by the Sustainable Energy Development Association (SEDA), an industry group, which is planning a lobbying push to put the idea on the radars of cabinet and other government agencies amid a recent surge in fuel import costs.
The initiative focuses on lowering upfront costs and stimulating demand through a package of direct incentives. It calls for concessional financing at 0% interest for solar energy adopters, and aims to raise the internal rate of return for end users from 20% to 38% by exempting components and EPC contracts from customs duties and VAT for five years. The initiative targets installing up to 5 GW over five years, potentially saving the state coffers around USD 500 mn annually in gas subsidies used for power generation.
How is the saving calculated? The calculation of natural gas savings under Shams Misr is based on converting solar generation capacity into equivalent thermal units and monetary value. The model assumes that every 1 MW of installed solar capacity saves around 10k MMBtu of gas annually. This benchmark is used to compare solar generation with conventional alternatives, particularly diesel-powered generators in off-grid areas. Based on an assumed LNG price of USD 15 per MMBtu, each 1 MW installed translates into annual savings of roughly USD 150k.
Sustainable financing included: The initiative also proposes establishing a dedicated fund under the name Shams Misr to finance solar expansion, funded through a levy of one piaster per kWh on electricity bills, generating around EGP 3 bn annually. Additional funding would come from penalties on high-emission, non-compliant activities. The mechanism is designed to secure stable domestic financing while unlocking access to international green finance and accelerating solar deployment to reduce the reliance on imported fuel and strengthen energy security.
Growing momentum: Calls to accelerate distributed solar adoption have gained traction on social media following the US-Israeli-Iran war and the resulting spike in global and local energy prices. Bn’aire Naguib Sawiris called for installing solar systems across residential compounds to enable self-sufficiency, while Hatem Tawfik, managing director of Cairo Solar and a SEDA board member, renewed calls for the government to adopt the Shams Misr initiative in a video posted online, highlighting its improving economic viability (watch, runtime: 3:31).