Another busy Wednesday at the cabinet: The Madbouly cabinet approved a number of decisions during its weekly meeting yesterday. Among the most significant are:

#1- More incentives for energy players: Cabinet agreed to implement the R-Factor mechanism in specific oil agreements and approved amendments to two exploration agreements in the Mediterranean for the Cairo and Masry offshore concession areas between Egyptian Natural Gas Holding Company and ExxonMobil to apply the R-Factor system.

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R-Factor? It is a contractual mechanism that is used to determine the revenue breakdown from an oil or gas project between an foreign oil player and the government. It is a more flexible mechanism than the usual fixed profit share and shares the risk between the government and foreign oil players — under the mechanism, the government receives a larger share of the revenue the more the project proves successful. The new system is expected to encourage companies to invest in untapped areas in the Mediterranean, the cabinet statement read.

REMEMBER- The Oil Ministry has been offering new incentives to energy players that include increasing production sharing ratios with foreign companies in exchange for new investments, enhancing exploration efforts, and increasing extraction rates, with the aim of boosting local production.

#2- Fresh auto incentives: The cabinet approved a new incentives program to support local car manufacturing. The new program raises the value-added metric to 60%, increases local industrial content to over 35%, boost annual production volume to 100k vehicles, encourages production of eco-friendly vehicles, and supports factories in priority development zones. Exporters will get extra perks and companies that exceed targets will receive additional incentives.

You heard it here first: EnterpriseAM reported earlier this month that the government is putting together new incentive criteria and additional benefits for automakers participating in the Automotive Industry Development Program in a bid to boost local component rates.

#3- Vocational education for high schoolers: The cabinet approved draft amendments to the law governing pre-university education to introduce a third track for high schools students — vocational education — to accompany the science and arts tracks in a bid to meet labor market needs.

#4- A bunch of new unis are coming to life: The cabinet approved draft presidential decrees to establish the private Egyptian-Chinese University, Orouba University in New Mansoura, and Masr El Gedida University in 6th of October City.

ALSO DURING THE CABINET MEETING- Investment Minister Hassan El Khatib presented the revamped export subsidy program to run until the fiscal year 2027-2028, under which exporters will receive 50% of their overdue dues in cash over four years, with the rest offset against liabilities. Under the new program, subsidy disbursements will be made in no more than 90 days and will be paid in full without tax deductions. The program, which would have an annual budget of EGP 45 bn, tailors support to each sector’s needs, starting with engineering and chemicals.

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