Regulatory Environment Government owned Free Market Captive customer eligible customer & spot market –on voltage level –on sector level Avoid market shocks Revisit subsidy policy CIRED 2003

The current structure of EEHC Cairo Alexandria El Beheira Delta Canal Mid. Egypt Upper Egypt West Delta Cairo East Delta Upper Egypt Hydro Plants Distribution Companies Production Companies Egyptian Electricity Transmission Company From July 1, 2001 Planned Egyptian Electricity Holding Company From July 1, 2001 CIRED 2003

Cairo CIRED 2003 Alexandria Canal Delta Behera Middle Egypt Upper Egypt Egyptian Electricity Transmission Company Hydro Production Company 4 Thermal Production Companies IPPs BOOTs Imports / Exports Generation Payments 1- Variable (based on output). 2-Fixed. 3- Performance – base. Import / Export payments Payments for Services IPP / BOOT Payments (according to contractual terms) Customer Revenue (Cash) Power Pool Pricing Mechanism Costs reimbursement scheme Large UHV & HV Customers

PROCESSES BEING REENGINEERED IN ALEXANDRIA Pilot Re-engineering Project Activity Based Costing (ABC)  Maintenance Management  Inventory & Procurement Management  Alternate Revenue Sources, and  Billing and Collection Process CIRED 2003