2022 was a good year for FDI: Foreign direct investment into Egypt more than doubled in 2022 on the back of higher cross-border M&A volumes and an expansion of greenfield projects, according to the UN’s latest World Investment Report (pdf). FDI inflows climbed to USD 11.4 bn during the year, up from USD 5.1 bn the year before, while outflows dropped 7% to USD 342 mn.

Driving growth: Cross-border M&A sales climbed while greenfield projects in the country more than doubled in number to 161. International project finance transactions also rose, jumping in value by two thirds to USD 24 bn, according to the report.

Egypt a bright spot in a bad year for Africa: Egypt received the largest FDI inflows of any African country during the year, according to the figures. South Africa (USD 9.0 bn) and Ethiopia (USD 3.7 bn) came second and third on the list, though flows were down from the previous year. Total FDI inflows for the continent was down markedly, falling 43%to USD 44.9 b n after a record year in 2021, driven by a single large transaction in South Africa.

Investments in our renewables sector are going strong: Egypt was Africa’s second-largest destination for investment in the renewable energy sector from 2015 to 2022, following South Africa. Together with South Africa, Kenya, Nigeria, and Zambia, it accounts for 44% of the continent’s renewables projects.

Two of the largest power generation and water treatment projects were in Egypt: The second-largest sustainable project announced in Africa last year was Indian renewable energy firm ReNew Power’s planned USD 8 bn green hydrogen plant in the Suez Canal Economic Zone, for which the company signed a framework agreement back in November. Meanwhile, the USD 1.5 bn solar-powered desalination plant that’s set to be built by Metito Holdings, Scatec Solar, and Orascom Construction (OC) is the third-largest planned investment in the continent’s water sector.

As well as transmission lines: The second largest number of investments announced in transmission line projects in emerging markets during 2022 were in Egypt, preceded by India and followed by Brazil, the UAE, and Kuwait.

** CAVEAT- Many of these projects don’t count as booked FDI for the country, sinc e financing and final investment decisions are yet to occur for many of the big ticket infrastructure projects signed last week. For example, ReNew, along with other hydrogen developers that have inked MoUs with the government have not moved beyond framework agreements and are continuing to study the feasibility of the projects.

An improved investment climate would help even more: The Madbouly government has in recent months pushed forward with reforms aimed to boosting private investment. In October 2022 it announced that it could give companies a tax cut of up to 55% on income generated by industrial FDI-funded projects — a move designed to attract more hard currency into the country — and in May of this year introduced a package of 22 reforms aimed at boosting investment. The UN report also points to the Financial Regulatory Authority’s (FRA) 2021 decision to make ESG disclosures a legal requirement.

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