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EBRD wants to snap up stakes in Egyptian state lenders: The European Bank for Reconstruction and Development (EBRD) is interested in acquiring minority stakes in several state-owned financial institutions that have been earmarked for privatization under the government’s offering program. The European lender has opened talks with the Sovereign Fund of Egypt (SFE) about investing in both United Bank and Banque du Caire — two of the three banks on the official privatization list — but is still waiting for clarity over the size of the stakes the government is willing to sell, Heike Harmgart, who heads the bank’s south- and east-Mediterranean operations, told Al Arabiya.
Refresher: The government rebooted its privatization program earlier this year, naming 35companies that will sell stakes to private investors as part of the government’s efforts to end the ongoing currency crisis and meet the terms of its USD 3 bn assistance program with the IMF.
It hasn’t been smooth sailing so far: BdC has long planned to IPO on the EGX but repeatedlydelayed the share sale due to poor market conditions. Meanwhile, talks with the Saudi sovereign wealth fund to sell 100% of United Bank collapsed earlier this year due to disagreements about how to value the lender amid volatility in the EGP/USD rate. Arab African International Bank is the third lender on the privatization list.
The government says it will have more news on privatization before the year is out: Cabinet is expecting to finalize agreements to sell a significant stake in its hotels holding company and military-owned fuel retailer Wataniya before the end of the year. It wants to sell two wind energy plants, the military-owned bottled water company Safi, the combined-cycle power plant in Beni Suef, and a number of desalination plants before the end of the fiscal year in June.
The EBRD is playing a role in privatizing new and renewable energy projects,Harmgart told the Saudi news outlet. The bank is working alongside the International Finance Corporation (IFC) to increase private-sector participation in desalination projects, and is currently in the initial procurement phase for four plants.
ICYMI: The government expects to offload stakes in four desalination plants during the first half of 2024, as part of a five-year plan drafted by the Housing Ministry to sell stakes in 21 plants.
