Egypt's installed generating capacity stood at 17.06 gigawatts (GW) as of 2004, with plans to add 4.5 GW of additional generating capacity by 2007 and 8.38 GW by mid-2012. Around 84 percent of Egypt's electric generating capacity is powered by natural gas, with the remaining 16 percent hydroelectric, mostly from the Aswan High Dam. All oil-fired plants have been converted to run on natural gas as their primary fuel, and thermal power plants now account for roughly 65 percent of Egypt 's total gas consumption. Overall, natural gas fuels 85 percent of Egypt's electricity production.

With electricity demand growing, Egypt is building several power plants and is considering limited privatization of the electric power sector. Egypt's power sector is currently comprised of seven regional state-owned power production and distribution companies, which were held by the Egyptian Electricity Authority (EEA). In July 2000, the EEA was converted into a holding company, though still owned by the state. Previous privatization plans have stalled, and the future direction of government policy in the electric utilities sector is unclear. Egypt has several privately-owned power plants currently under construction which were financed under Build, Own, Operate, and Transfer (BOOT) financing schemes. The first BOOT project was a gas-fired steam power plant with two 325-megawatt (MW) generating units, located at Sidi Kerir on the Gulf of Suez. The plant cost $450 million, and began commercial operation in late 2001. U.S.-based InterGen (a joint venture of Bechtel Enterprises and Shell Generating Ltd.), along with local partners Kato Investment and First Arabian Development and Investment, have the 20-year BOOT contract for Sidi Kerir. The second BOOT power project award went to Electricite de France (EDF), for two natural gas-fired plants located near the cities of Suez and Port Said. The two plants, which came online in 2003, have a total capacity of 1,366-MW. However, these assets now belong to Tanjong's Powertek, who in early 2006 formalized a sales agreement with EDF. Additionally, in February 2006, the World Bank agreed to fund a 700-MW plant expected to cost roughly $260 millon which will contain two 350-MW steam turbines.

EEHC-owned projects currently under construction include the 1,500-MW plant planned at Nuberiya in the western Nile Delta near Alexandria. The 64-MW Nag Hammadi hydropower project is under construction, with financing from the European Investment Bank, and is scheduled for completion in 2006. After several years of delays, the 1,500-MW capacity expansion at the Cairo North power complex came online in mid-2004. A contract has been awarded to Russia's Power Machines Group for the refurbishment of the turbines at the Aswan High Dam. The project will extend the operational life of the turbines by about 40 years and increase generating capacity at the dam from 2,100 MW to 2,400 MW.

Egypt also is planning to build a part-solar power plant at Kureimat as a BOOT project, which will have 30 MW of solar capacity out of a total planned capacity of 150 MW. The World Bank will provide a financing package from its Global Environmental Facility which will offset the cost difference between the solar capacity and thermal capacity. A Netherlands-funded project is building 60 MW worth of wind power units in the Suez Canal area. Egypt also has a 22-MW nuclear research reactor at Inshas in the Nile Delta, built by INVAP S.A. of Argentina, which began operation in 1997.

Work has been completed on the interconnection of Egypt's electric transmission grid with other countries in the region. The Five-Country interconnection of Egypt's system with those of Jordan, Syria, and Turkey was completed by 2002. Egypt also activated a link to Libya's electric grid in December 1999.