Madbouly talks power cuts, gas production, and FDI in weekly presser: Prime Minister Moustafa Madbouly’s weekly presser brought us significant news regarding Egypt’s long-running energy crisis and confirmed state plans to develop Ras Banas, according to cabinet statements here and here.

#1- No more load shedding: “The electricity will not be cut off again... and there will be no more load shedding,” Madbouly said, adding that the government is working to secure the necessary energy shipments to keep the lights on 24/7. We had been expecting power cuts to return last week, after Madbouly indicated in July that they would be back after an eight-week hiatus.

#2- Gas production to return to normal levels next summer: Our natural gas output will return to normal levels before June 2025, Madbouly said, adding that the dip in production was due to the government’s inability to pay foreign companies their dues. Oil players have been ramping up their activity in Egypt after the government started clearing its arrears to foreign oil and gas companies operating in the country and the recently-introduced incentive package for oil and gas players helped sweeten the pot even further.

Remember: The government bought 20 cargoes of LNG for some USD 907 mn to cover domestic needs between October and December. The Egyptian General Petroleum Corporation awarded the tender under a six-month deferred payment plan.

#3- More details on the upcoming Saudi investments: The Saudi government’s plannedinvestment of USD 5 bn in Egypt is separate from previous deposits at the Central Bank of Egypt, Madbouly said. “The USD 5 bn investments will be in projects that will be decided mutually later in important economic sectors,” Madbouly said, pointing to the tourism, industry, and renewable energy sectors.

Remember: Saudi Crown Prince Mohammed bin Salman announced last week that he has directed Saudi’s Public Investment Fund (PIF) to invest USD 5 bn in Egypt as part of the “first phase” of a larger program of investment. No timeline of when we can expect to see the funds was disclosed.

And that’s not all: Saudi private-sector companies and the PIF have expressed interest in doubling their investments over “the coming period,” Madbouly said, putting the figure somewhere between USD 10-15 bn. The investments will go towards renewable projects and seawater desalination plants.

Market reax: Madbouly’s statements pushed our sovereign USD bonds to two-year highs, meanwhile bills went as high as 99.52 cents, according to Reuters.

It’s all about FDI: Madbouly pointed to a number of meetings that took place between Egyptian representatives and their foreign counterparts during recent weeks, including President Abdel Fattah El Sisi’s recent meeting with German President Frank-Walter Steinmeier in Cairo, as well as the Egypt-Kuwait Joint Committee and Madbouly’s own visit to Riyadh alongside Finance Minister Ahmed Kouchouk and Investment Minister Hassan El Khatib. Madbouly emphasized that these meetings come against the backdrop of state efforts to “increase direct investment rates and attract more foreign investments.”

#4- It’s not just Ras Banas that’ll get the Ras El Hekma treatment: Madbouly confirmed Housing Minister Sherif El Sherbiny’s statement last week that the government is working on an investment plan to offer the Red Sea’s Ras Banas to private sector players in a transaction similar to ADQ’s Ras El Hekma USD 35 bn agreement, adding that the area is one of four to five large areas along the Red Sea that the government has earmarked for Ras El Hekma-esque investments — all in an effort to boost foreign direct investment, he said.

We may already know one of those areas: The Madbouly government set up a ministerial committee earlier this year to select a consultant to manage, evaluate, and market Sharm El Sheikh’s Ras Gamila — a plot that is “far smaller” than Ras El Hekma, but one that will still bring in USD bns nonetheless. Saudi Arabia’s Ajlan & Bros Holding in April reportedly put in an offer to secure a land plot at Ras Gamila for the establishment of ten hotels with 3k keys in the first phase of a bigger development plan.

The story also got ink in the international press: Reuters | Bloomberg.

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