Egypt is a country full of ambiguities for investors and risk analysts, let alone for a population living under the economic restructuring and authoritarian rule of President Abdel Fattah El-Sisi. “The Egyptian power sector is viewed as an attractive destination for investment due to a relatively stable government, economy and policy direction,” observes the new Egypt Power Report from the African Energy consultancy. In the upstream, the huge Zohr offshore gas find has revived optimism about an industry that was mired in debt and problems with investors. “However, a number of underlying tensions and challenges mean that long-term investments in the country are far from being risk-free.” These tensions are linked to the crushing of opposition, the economic and social demands of a fast-rising but under-resourced population, environmental stresses and doubts about finances (reflected in unconfirmed reports of recent payments shortfalls for solar and other investors).

The foundations of Sisi’s governance are security, control and economic efficiency, which are intended to provide a platform for growth and stability following the dramatic ousting of Hosni Mubarak in 2011 (the former president died on 25 February aged 91) and the July 2013 coup that deposed democratically elected Islamist Mohamed Morsi (who died in captivity last June). In this reconfiguration of power, the military controls swathes of local industry, no serious opposition is permitted (with tens of thousands of Islamist and other opponents in prison), and the media and communications are tightly controlled. Sisi has support: at least a substantial minority of the population prefers competent authoritarianism over what they view as incompetent and potentially radical popular Islam. The report concludes: “The social compact on which Sisi’s rule depends is thus identical to that which sustained Mubarak, Anwar Sadat and Gamal Abdel Nasser before him – that is the exchange of democratic freedoms for security and economic well-being.”

There seems to be no immediate threat to Sisi’s political settlement from a resurgence of radical Islam; the Muslim Brotherhood has been crushed and popular discontent has no other focus to organise around. But the authorities need to maintain their side of the bargain by guaranteeing the economic well-being of the wider population. This has given impetus to the impressive number of macroeconomic reforms pushed through in the past five years, in parallel with Sisi’s re-energising of the command economy, as highlighted by the Suez Canal Economic Zone’s development and plans for a new capital.

Since reaching agreement on an extended fund facility with the International Monetary Fund in November 2016, the authorities have devalued the Egyptian pound and cut subsidies and other spending. This has opened space for investment, and companies have flooded in. Egypt has emerged as a global-scale success story for renewable energy. The grid now has a reserve margin of around 83% – which many argue represents significant overcapacity – and more investment is expected as the government targets up to 47% of generation from renewables by 2035, compared to 6% at end-2019. The 1.44GW solar feed-in tariff scheme at Benban and large-scale tendering for Gulf of Suez wind projects point to successful procurements most African governments can only dream of.

When Sisi has dared, he has often succeeded. When in mid-2015 he oversaw the signing of an $8.1bn agreement with Germany’s Siemens for three vast gas-fired combined-cycle gas turbine plants totalling 14.4GW, there was little evidence that improved incentives for upstream exploration would restore domestic gas production, but Eni’s discovery of the 2.7bcf/d offshore Zohr field two months later virtually guaranteed success.

Sisi will need to stay just as lucky as a previous military strongman in Egypt, Napoleon, wished all his generals to be. For amid the contract awards and the undoubted benefits of investing in sustainable technologies, Egypt’s prisons remain full and its people’s voices are muted, while living costs rise and social pressures mount. Sisi’s Egypt has much to shout about, but also much to fear.