<p style="text-align: justify;">In this week's edition, we examine the developments of the Haya Karima program and needs of the Egyptian countryside, in addition to the opportunities and challenges of the electrical interconnection projects between Egypt and other countries</p>
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<h2><strong>&ldquo;Decent Life&rdquo;: What Does the Egyptian Countryside Need?</strong></h2>
<p dir="ltr" style="text-align: justify;">Minister of Planning and Economic Development Hala al-Said&nbsp;<a href="https://www.facebook.com/MPEDEGYPT/posts/pfbid08H8sFzVVvSnvo26JHfJbukGaiN6Dv5kq8UD4eXu3kqRefUWpf3njAhyBLUg1GMnBl">announced</a>&nbsp;on May 9, 2023 that EGP180 billion would be allocated in fiscal year 2023/24 for the completion of projects in the Decent Life development program (Hayah Karima); with EGP150 billion earmarked for the rest of the first phase, and EGP30 billion as initial appropriations for the second phase. Aimed at improving life in Egypt&rsquo;s rural areas, the Decent Life program&nbsp;<a href="https://www.hayakarima.com/">has covered</a>&nbsp;more than 4,500 villages in 20 governorates since its inception, with more than&nbsp;<a href="https://mped.gov.eg/AdminPanel/sharedfiles/bd822a2f-1998-4855-a6e6-fd62749f7d26_financing_sustainable_development_in_egypt_feb_28-compressed.pdf">4.5 million beneficiaries</a>.&nbsp;</p>
<p dir="ltr" style="text-align: justify;">While official sources say that the projects will be completed in 3 to 4 years, Minister of Social Solidarity Nivine al-Qabbage recently&nbsp;<a href="https://almessa.gomhuriaonline.com/%d8%a7%d9%84%d9%82%d8%a8%d8%a7%d8%ac-%d8%aa%d8%b1%d9%8a%d9%84%d9%8a%d9%88%d9%86-%d8%ac%d9%86%d9%8a%d9%87-%d8%aa%d9%83%d9%84%d9%81%d8%a9-%d8%ad%d9%8a%d8%a7%d8%a9-%d9%83%d8%b1%d9%8a%d9%85%d8%a9/">announced</a>&nbsp;that the program will cost up to EGP1 trillion by 2034, suggesting that the projects underway&nbsp;<a href="https://south.euneighbours.eu/ar/publication/%d8%a7%d9%84%d9%87%d8%b4%d8%a7%d8%b4%d8%a9-%d8%a7%d9%84%d8%b1%d9%91%d9%8a%d9%81%d9%8a%d9%91%d8%a9-%d9%88%d8%a8%d8%b1%d8%a7%d9%85%d8%ac-%d8%a7%d9%84%d8%aa%d9%91%d9%88%d8%b8%d9%8a%d9%81-%d9%88%d8%a7/">will likely not</a>&nbsp;be completed by the declared deadline, as their scope and ambition continue to expand. Over the last two years, the total investments targeted for the program have increased 1,000-fold.</p>
<h3 dir="ltr"><strong>What is Decent Life?</strong></h3>
<p dir="ltr" style="text-align: justify;">One of Egypt&rsquo;s largest infrastructure projects, <a href="https://www.hayakarima.com/">Decent Life</a>&nbsp;is a national initiative&nbsp;<a href="https://www.facebook.com/AlSisiofficial/posts/2972806342745685">launched</a>&nbsp;in 2019 to improve living conditions and the quality of life for Egyptians in the poorest rural areas, which are home to 60 million citizens, or 58% of the total population. In 2021, the scope of the project expanded. It now aims to improve geographical equity (narrow the development gap between urban and rural Egypt) by providing village residents with basic services such as clean water and gas, electric, and road infrastructure, as well as education, health, decent housing, and employment and vocational training. The program&rsquo;s projects are being implemented through a wide-ranging&nbsp;<a href="https://www.shorouknews.com/news/view.aspx?cdate=15072021&amp;id=6fcb5b23-22c4-4fde-b462-ed953f52fd35">collaboration</a>&nbsp;of more than 20 ministries and government agencies, 23 civil society organizations, and private sector companies in Egypt.</p>
<p dir="ltr" style="text-align: justify;">Decent Life is not the first rural development program in Egypt. It was preceded by several, similar large-scale initiatives in the past few decades, including the National Program for Comprehensive Rural Development (1994), the Thousand Villages project (2007), and the Egyptian Village Development Program (2014). Despite their ambitions, these programs did not achieve their goals for political and economic reasons.</p>
<h3 dir="ltr"><strong>What about costs and financing?</strong></h3>
<p dir="ltr" style="text-align: justify;">The most recent official estimate <a href="https://enterprise.news/news/edition?id=558812d8-5b71-4786-8661-919ecf796c12">puts</a>&nbsp;the full cost of the program at EGP700&ndash;790 billion, with&nbsp;<a href="https://eces.org.eg/wp-content/uploads/2023/02/Mega-Projects-Infrastructure-Hayah-Kareema-Ar.pdf">EGP260 billion</a>&nbsp;having been spent on the still incomplete first phase. Program managers&nbsp;<a href="https://alborsaanews.com/2023/02/14/1632790">recently</a>&nbsp;<a href="https://amwalalghad.com/2022/08/08/%D8%AD%D9%8A%D8%A7%D8%A9-%D9%83%D8%B1%D9%8A%D9%85%D8%A9-%D9%85%D9%8A%D8%B2%D8%A7%D9%86%D9%8A%D8%A9-%D8%A7%D9%84%D9%85%D8%A8%D8%A7%D8%AF%D8%B1%D8%A9-%D9%82%D8%A7%D8%B1%D8%A8%D8%AA-900-%D9%85%D9%84/">stated</a>&nbsp;that the cost will reach EGP900 billion by the end of 2023 alone.</p>
<p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://mcusercontent.com/5e42bef7fee7e6a299c3d932d/images/b1dd6748-8d8c-de7b-de83-5218dbd09ca3.png" width="546" height="432"></p>
<p dir="ltr" style="text-align: justify;">The bulk of funding for the program &ndash;&nbsp;<a href="https://www.shorouknews.com/news/view.aspx?cdate=15072021&amp;id=6fcb5b23-22c4-4fde-b462-ed953f52fd35">about 80%</a>&nbsp;&ndash;&nbsp;<a href="https://enterprise.press/ar/stories/2022/01/19/%D9%85%D8%A8%D8%A7%D8%AF%D8%B1%D8%A9-%D8%AD%D9%8A%D8%A7%D8%A9-%D9%83%D8%B1%D9%8A%D9%85%D8%A9-%D8%A7%D9%84%D9%85%D8%A7%D8%B6%D9%8A-%D9%88%D8%A7%D9%84%D8%AD%D8%A7%D8%B6%D8%B1-%D9%88%D8%A7/">comes from</a>&nbsp;the&nbsp;<a href="https://www.alborsaanews.com/2022/10/10/1585236">general budget</a>&nbsp;and public investments of the state and its agencies; contributions from the Tahya Misr Fund, civil society organizations, local development funds, and other donations make up the remaining 20%. But many of the funding sources are&nbsp;<a href="https://documents1.worldbank.org/curated/en/099445009262224542/text/P1759070f2f3880980a71e0064707c8f421.txt">unclear</a>&nbsp;and the published figures are inconsistent.&nbsp; Moreover, no official, documented data has been released about the program, its combined budget, and the actual burden it places on the budget, all which should be transparent and readily accessible,&nbsp;<a href="https://www.povertyactionlab.org/blog/12-15-21/toward-evidence-informed-development-agenda-egypt-fostering-government-research">experts</a>&nbsp;say.</p>
<h3 dir="ltr"><strong>Opportunities and challenges</strong></h3>
<p dir="ltr" style="text-align: justify;">The Decent Life program is distinguished from its predecessors by the integrated coordination between state institutions, the private sector, civil society, and development partners in Egypt, but in order to have a genuine and sustainable impact, several challenges must be addressed. In addition to the lack of up-to-date data, program managers should develop systems for monitoring and evaluating program objectives and impacts and&nbsp;<a href="https://eces.org.eg/wp-content/uploads/2023/02/Mega-Projects-Infrastructure-Hayah-Kareema-Ar.pdf">share them</a>&nbsp;with all stakeholders, both service recipients and civil society. The consequences of the lack of or delay in monitoring and evaluation is demonstrated by the Ministry of Irrigation&rsquo;s&nbsp;<a href="https://south.euneighbours.eu/ar/publication/%d8%a7%d9%84%d9%87%d8%b4%d8%a7%d8%b4%d8%a9-%d8%a7%d9%84%d8%b1%d9%91%d9%8a%d9%81%d9%8a%d9%91%d8%a9-%d9%88%d8%a8%d8%b1%d8%a7%d9%85%d8%ac-%d8%a7%d9%84%d8%aa%d9%91%d9%88%d8%b8%d9%8a%d9%81-%d9%88%d8%a7">decision</a>&nbsp;to reconsider the program project of lining canals and waterways: after spending more than EGP80 billion in 2021 on an area of 20,000 kilometeres, the ministry cautioned that it was&nbsp;<a href="https://www.almasryalyoum.com/news/details/2795568">wasteful</a>&nbsp;&ndash; according to a statement by the minister &ndash; and that such projects should have been studied on a case-by-case basis.</p>
<p dir="ltr" style="text-align: justify;">Program projects are also heavily tilted toward infrastructure, with the largest share of investment going to sanitation and road projects &ndash; which are&nbsp;<a href="https://almalnews.com/%d8%a7%d9%84%d8%ad%d9%83%d9%88%d9%85%d8%a9-%d8%aa%d9%8f%d9%82%d8%b1-%d8%a3%d9%88%d8%a7%d9%85%d8%b1-%d8%a5%d8%b3%d9%86%d8%a7%d8%af-%d8%a8%d8%a7%d9%84%d8%a3%d9%85%d8%b1-%d8%a7%d9%84%d9%85%d8%a8%d8%a7/">awarded</a>&nbsp;<a href="https://eces.org.eg/wp-content/uploads/2023/02/Mega-Projects-Infrastructure-Hayah-Kareema-Ar.pdf">absent</a>&nbsp;a competitive tender process &ndash; at the expense of projects to improve medical and educational services and provide villages with medical and educational professional staff. A better&nbsp;<a href="https://south.euneighbours.eu/ar/publication/%d8%a7%d9%84%d9%87%d8%b4%d8%a7%d8%b4%d8%a9-%d8%a7%d9%84%d8%b1%d9%91%d9%8a%d9%81%d9%8a%d9%91%d8%a9-%d9%88%d8%a8%d8%b1%d8%a7%d9%85%d8%ac-%d8%a7%d9%84%d8%aa%d9%91%d9%88%d8%b8%d9%8a%d9%81-%d9%88%d8%a7">balance</a>&nbsp;of priorities and expenses is therefore needed.</p>
<h3 dir="ltr"><strong>What does the Egyptian countryside need?</strong></h3>
<p dir="ltr" style="text-align: justify;">Hussein Suleiman, an economic researcher at the Ahram Center for Political and Strategic Studies, <a href="https://south.euneighbours.eu/ar/publication/%d8%a7%d9%84%d9%87%d8%b4%d8%a7%d8%b4%d8%a9-%d8%a7%d9%84%d8%b1%d9%91%d9%8a%d9%81%d9%8a%d9%91%d8%a9-%d9%88%d8%a8%d8%b1%d8%a7%d9%85%d8%ac-%d8%a7%d9%84%d8%aa%d9%91%d9%88%d8%b8%d9%8a%d9%81-%d9%88%d8%a7">believes</a>&nbsp;that the extensive infrastructure projects of the Decent Life program will not eliminate poverty in rural Egypt because they do not focus on the creation of sustainable jobs. Only high-quality jobs that generate sufficient income for the region&rsquo;s residents can reduce poverty rates. According to CAPMAS, the official statistics agency, only 41% of the total rural population of working age were employed in 2021; the rest were unemployed or out of the labor force entirely. To combat poverty and achieve more inclusive development, experts recommend a different set of policies aimed at expanding rural employment opportunities by improving the business environment, encouraging the growth of the export-oriented, private agricultural sector, and training the rural population to fill the recently created positions in service provision.</p>
<hr>
<h2><strong><span style="color: rgb(6, 71, 137);">Electrical Interconnection Projects: Promising Opportunities and Challenges</span></strong></h2>
<p dir="ltr" style="text-align: justify;">In early May 2023, the Egyptian Cabinet&nbsp;<a href="https://www.facebook.com/EgyptianCabinet/posts/pfbid08BtgGrRiKWDys9dCCtNCeTtRtafdFhoBiy41GR8XiqsTLWfQ5XeW38pjbgQhrfWcl">approved</a>&nbsp;the signing of a memorandum of understanding between the Egyptian Electric Company and the Norwegian renewable energy producer Scatec to begin studies for a new electrical interconnector between Egypt and Europe with a capacity of 3 gigawatts. Interconnection projects create a cable infrastructure to link two power grids, and Egypt hopes this project will allow it to export clean energy to Europe through undersea cables passing through Italy. While the MoU did not specify targets for investments or profits, to date Scatec has invested&nbsp;<a href="https://www.shorouknews.com/news/view.aspx?cdate=15052023&amp;id=81d9a392-5041-4344-8b15-e744f19cbfcf">more than USD12.5 billion</a>&nbsp;in Egypt, all in green projects.</p>
<p dir="ltr" style="text-align: justify;">Over the past seven years, Egypt has sought to develop&nbsp;<a href="http://www.moee.gov.eg/english_new/Presentations/EGYPT_Energy_Transition.pdf">at least</a>&nbsp;<a href="https://www.trade.gov/country-commercial-guides/egypt-electricity-and-renewable-energy">seven</a>&nbsp;electrical interconnectors, 57% of which are aimed at exporting renewable energy.</p>
<p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://mcusercontent.com/5e42bef7fee7e6a299c3d932d/images/1b36cd88-e5e2-c89b-fb8c-46323cbc5ea3.png" width="546" height="432"></p>
<p dir="ltr" style="text-align: justify;">The energy negotiations with Egypt and neighboring countries come as Europe is experiencing a severe energy crisis of a kind not seen in years, amid gas supply shortages and subsequent price hikes due to the Russia-Ukraine war. These projects help to reintegrate the countries of the Global South &ndash; including Egypt &ndash; as producers in the international economy, bringing in hard currency to countries that depend on imports for food and basic goods. They could also bring sustainable gains if revenues are spent on social development.</p>
<h3 dir="ltr"><strong>Do ambitions align with reality?</strong></h3>
<p dir="ltr" style="text-align: justify;">Egypt <a href="https://www.asharqbusiness.com/article/45647/%D8%A5%D9%8A%D8%B7%D8%A7%D9%84%D9%8A%D8%A7-%D8%AA%D8%B9%D8%B1%D8%B6-%D8%B9%D9%84%D9%89-%D9%85%D8%B5%D8%B1-%D9%85%D8%B4%D8%B1%D9%88%D8%B9-%D8%B1%D8%A8%D8%B7-%D9%83%D9%87%D8%B1%D8%A8%D8%A7%D8%A6%D9%8A-%D8%A8%D8%AA%D9%83%D9%84%D9%81%D8%A9-28-%D9%85%D9%84%D9%8A%D8%A7%D8%B1-%D8%AF%D9%88%D9%84%D8%A7%D8%B1/">produces</a>&nbsp;58,000 megawatts of electricity daily, only 6,000 megawatts of which is supplied by renewable energy. Its daily consumption is 33,000 megawatts, leaving a surplus of some&nbsp;<a href="https://www.alarabiya.net/aswaq/economy/2023/05/15/%D9%85%D8%B5%D8%B1%D8%AA%D8%A8%D8%AF%D8%A3-%D8%AF%D8%B1%D8%A7%D8%B3%D8%A7%D8%AA-%D8%AA%D8%B5%D8%AF%D9%8A%D8%B1-%D8%A7%D9%84%D8%B7%D8%A7%D9%82%D8%A9-%D8%A7%D9%84%D9%85%D8%AA%D8%AC%D8%AF%D8%AF%D8%A9-%D9%84%D8%A3%D9%88%D8%B1%D9%88%D8%A8%D8%A7-">25,000 megawatts</a>&nbsp;for export. Egypt aims to&nbsp;<a href="https://gate.ahram.org.eg/daily/News/204495/136/900841/%D9%85%D8%AA%D8%A7%D8%A8%D8%B9%D8%A7%D8%AA/%D8%AE%D9%84%D8%A7%D9%84-%D9%85%D9%86%D8%A7%D9%82%D8%B4%D8%A9-%D9%85%D8%AC%D9%84%D8%B3-%D8%A7%D9%84%D8%B4%D9%8A%D9%88%D8%AE-%D9%84%D9%85%D9%84%D9%81-%D8%AA%D8%B5%D8%AF%D9%8A%D8%B1-%D8%A7%D9%84%D9%81%D8%A7%D8%A6%D8%B6-%D9%85%D9%86-%D8%A7%D9%84%D9%83%D9%87%D8%B1.aspx">accelerate the generation</a>&nbsp;of 42% of its electricity from renewables by 2030 to cover local needs - originally planned to be by 2035, yet this will not be enough to meet export needs as well. That would require a rapid expansion of renewable energy projects, which may increase costs and risks absent thorough feasibility studies.</p>
<h3 dir="ltr"><strong>Challenges and recommendations</strong></h3>
<p dir="ltr" style="text-align: justify;">Most of the agreements and MoUs on electrical interconnection projects between Egypt and other countries lack transparent, clear information about plans and costs. In this regard, members of the House of Representatives and the Senate last week <a href="https://www.tahiamasr.com/783222">called on</a>&nbsp;the Egyptian government to clarify the desired economic objectives of electrical interconnection projects with Europe, their sources of funding, policies on the export of electricity surpluses, and the climate and social repercussions of such projects.</p>
<p dir="ltr" style="text-align: justify;">Relevant expert&nbsp;<a href="https://blogs.iadb.org/energia/en/4-major-challenges-of-regional-interconnection-projects/">reports</a>&nbsp;recommend that the parties to such agreements consider the environmental and social justice aspects and tradeoffs, involve all stakeholders (especially those in the exporting country who will be affected by the interconnector), and ensure that the projects provide them with adequate economic compensation and sustainable employment opportunities.</p>
<hr>
<p dir="ltr"><a href="https://aucegypt.us17.list-manage.com/subscribe?u=5e42bef7fee7e6a299c3d932d&amp;id=e0d95df1c1&amp;mibextid=Zxz2cZ"><em>Subscribe to the weekly edition</em></a></p>
<p><em>"Adasa" is a weekly policy digest by Alternative Policy Solutions. "Adasa" provides an analysis of a select number of policy developments and their effect on inclusive development and socioeconomic change.</em></p>

عدسة

Adasa

الطاقة

Energy

حماية اجتماعية

Social Protection

الطاقة المتجددة

Renewable Energy

التنمية الشاملة

Inclusive Development

حياة كريمة و مشاريع الربط الكهربائي

Haya Karima and Electrical Interconnection Projects

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