Egypt’s Minister of Electricity and Renewable Energy Mohamed Shaker delivered a speech from the headquarters of the League of Arab States during the extraordinary meeting of the Arab Ministerial Council to consider the approval of the two agreements of the Arab Joint Electricity Market (the General Agreement and the Market Agreement).
Shaker stated, “Today, we reap the rewards of long-term efforts to achieve comprehensive Arab electrical interconnection. This goal has garnered the attention of Arab monarchs, heads of state, and energy ministers, in line with the implementation of the decision of the Algiers Summit in 2005, which called for conducting a comprehensive study to estimate the needs of the least economically developed Arab countries to complete their internal electrical systems. This is a necessary step toward interconnecting them with Arab countries in the electrical sector. It also underscores the importance of aligning institutional and legal frameworks with the requirements of electrical interconnection projects.”
In accordance with successive Arab summit resolutions calling for the completion of Arab electrical interconnection projects, given their importance in creating an integrated Arab energy market managed according to economic principles, including the Riyadh Arab Summit decision in March 2007 “to task the Arab Ministerial Council for Electricity in its seventh session in April 2007 with accelerating the completion of a comprehensive study on the future of Arab electrical interconnection projects over the next twenty years, given their importance in creating an integrated Arab energy market based on the existence of a robust institutional framework accompanied by complete infrastructure that takes into account the technical aspects of market integration and a legislative framework based on adopting four essential documents for market governance: the Memorandum of Understanding to establish a common Arab market, the General Agreement, the Arab Joint Market Agreement, and the rules of operation of Arab networks.”
Regarding the General Agreement and the Market Agreement for Electricity, which are presented today for your honorable council’s approval of the 2022 amended version, I am pleased to announce that the Secretariat of the Council has received approval from thirteen Arab countries for the two agreements. The latest approvals came from the Kingdom of Saudi Arabia and the Arab Republic of Egypt, with the door open for further approvals from other Arab countries.
Recent global energy market changes, including the COVID-19 pandemic and the Russia-Ukraine conflict, have underscored the importance of securing energy supplies for each country. The presence of regional blocs has significantly impacted the management of the global energy market.
This emphasizes the importance of Arab electrical interconnection as one of the most significant Arab integration projects, paving the way for the establishment of a joint Arab electricity market to ensure more sustainable energy and achieve energy integration among Arab countries. It also removes barriers and challenges hindering the integration of the electricity market and reaching a common Arab market for electricity trade, which will undoubtedly yield numerous technical, economic, environmental, social, political, and legal benefits. This includes improving the reliability of electrical energy systems economically, enhancing operational efficiency, reducing fixed and rotating reserve percentages to address emergencies in individual systems, increasing the dynamic stability of the power network, reducing the cost of electricity generation, in addition to the direct savings in capital investments resulting from deferring the establishment of new production stations. This will provide financial returns to the countries through which electrical interconnection lines pass (transit countries), and facilitate the exchange and trade of electrical energy to serve economic aspects. It also allows for the utilization of all available energy sources, especially renewable energy, and reduces emissions by using the most efficient production. Furthermore, it involves the exchange of technical, financial, and legal expertise between countries and works on harmonizing the regulatory rules of interconnected countries’ networks. Lastly, it enhances security between countries and political stability, creating an atmosphere of cooperation, dialogue, and common economic interests, along with creating new job opportunities during the construction and operation phases.
As we look forward to the future, we aim to enhance and combine efforts to pave the way for the implementation of the aforementioned agreements and work on completing the necessary procedures to activate the joint Arab market. This includes building the institutional structure for market management and highlights the importance of exchanging expertise, capacity building, and training for both Arab and national staff to enable them to deal with current challenges and opportunities using the latest technology and modern software for market operation and management, thus ensuring stability and performance quality in the joint Arab market.
After all this effort and hard work in preparing the General Agreement and the Market Agreement, which culminates today with the approval of the two agreements, I would like to express my gratitude to all those who contributed to this great work. I especially thank the members of the Council Secretariat and the Energy Management for their continuous work and diligent efforts in implementing the decisions of the Arab Ministerial Council for Electricity. I also extend my thanks to the technical, advisory, and expert committees and the concerned parties of the member countries for their efforts over several years. Lastly, I express my gratitude to the World Bank for its contribution to developing the governance documents of the Arab Joint Electricity Market, as well as its effective role in the experimental project of the regional pricing mechanism for the Arab Joint Market. This project is one of the most important elements necessary for establishing the Arab electricity market, in addition to its efforts in preparing the institutional framework for the joint Arab market through the establishment of the Market Secretariat and its committees.