IMF mission lands in Cairo a month early for seventh review

Good morning, friends. Reform week is here, and it’s moving faster than we thought.

An IMF mission landed Monday and began the seventh review yesterday — over a month ahead of schedule. The government filed updated reform credentials days before the mission flew in, in a bid to prove reforms will outlast the loan program itself.

On cue, the ERA hiked electricity tariffs 18-31% per kWh for several economic and service sectors. Households are spared the direct hit; the pass-through isn't. This is the rules-based pricing the IMF has been asking for.

ALSO- Korra Energi is breaking the IPO wait-and-see with an 11% EGX float, and Russian crude imports were up 217% in April after a US Treasury waiver.

***

THANK YOU to everyone who filled out our first listener survey. If you’re seeing this for the first time, Morning Drive has been up and running for a while now, and we think it’s time for a quick check-in. So if you have a few minutes to spare, we’d love to hear from you, whether you’re a longtime listener, you’ve only just heard us, or you’re somewhere in between. AND — here’s today’s episode .

***

A month ahead of schedule

An IMF mission landed in Cairo on Monday and began the seventh review of the country’s economic reform program yesterday, over a month earlier than previously anticipated, a senior government source tells EnterpriseAM. The delegation reportedly began its two-week visit on Monday with meetings at the Central Bank, followed by sit-downs with the Cabinet and Finance Ministry.

The government is working to prove its reforms are durable. The visit follows the government’s submission of updated structural reform credentials to the Fund earlier this week, which was designed to demonstrate that its recent policy shifts — including the third overhaul of the State Ownership Policy and the transition to rules-based energy pricing — will outlast the loan program itself.

Charged up

As the IMF mission visit commences, the Electricity Regulatory Authority (ERA) has hiked electricity prices for several economic and service sectors, according to a government document seen by EnterpriseAM. Households are spared the direct hit, but the indirect pass-through to consumer prices is another matter.

The new rates, per kWh:

• Metro: EGP 1.89, up from EGP 1.60 (up 18.1%);
• Irrigation: EGP 2.55, up from EGP 1.94 (up 31.4%);
• Water distribution companies: EGP 2.55, up from EGP 1.94 (up 31.4%);
• Commercial and service subscribers: EGP 2.55, up from EGP 1.94 (up 31.4%).

Why now? “The 18-month freeze on power prices significantly widened the gap between production costs and retail rates. The new tariffs are designed to gradually align prices with the actual cost of generating each kWh,” a government official tells EnterpriseAM. Production costs have climbed on higher natural gas prices and heavier reliance on imports to meet peak summer demand, we’re told.

Why it matters: The IMF wants Egypt off state-set pricing and onto a rules-based energy formula — and this hike is the government’s answer. Narrowing the gap between generation and retail is how the government plans to cut the energy subsidy bill from EGP 75 bn to just EGP 15.8 bn. It also matters for the EGPC-Electricity bottleneck we reported yesterday — the Finance Ministry’s move to settle historic dues for the Petroleum Corporation only holds if the electricity and water sectors stop running deficits.

Indian investment, Egyptian phosphate

Three Indian companies are weighing nearly USD 1 bn in investments in our phosphate and fertilizer sector, Alborsa reports, citing unnamed sources. The targeted projects — spanning extraction, manufacturing, and export-linked logistics hubs in Ain Sokhna and the New Valley — are still in the approvals stage, with the firms in talks with the General Authority For Investments.

Why it matters: The move indicates that India may be interested in moving beyond just buying Egyptian fertilizer to getting a foothold in the country’s production. The ongoing regional war has driven urea prices for Indian buyers up more than 40% to over USD 700 per ton, turning fertilizer into a national security issue. Indian firms have already contracted 350k tons from local producers. Egypt’s 980 mn-ton Abu Tartour phosphate reserves and the EGP 16 bn Ain Sokhna fertilizer complex make the country an attractive option for new investments.

Filling the tank and pantry

Another year, another USD 1.5 bn from the ITFC: The Madbouly government signed a USD 1.5 bn annual work program with the International Islamic Trade Finance Corporation to support our energy and food security, according to a Planning Ministry statement.

Joining the club, again

HSBC Egypt is the latest private bank to hike rates on its fixed-return savings product, raising the yield on its three-year savings certificate to 17.25%, up from 16%, according to the lender’s website.

IN CONTEXT- The move falls in line with other commercial banks seeking to shield their deposit portfolios from being swallowed up by state lenders, which hiked rates on their certificates of deposit by 125 bps as of last month. The move aims to help the central bank absorb excess liquidity and curb dollarization through market instruments without adjusting official corridor rates.

Money for the rails

The Transport Ministry is looking to secure EGP 321 bn (c. USD 5.8 bn) in fresh financing in FY2026/27 to clear out its pipeline of nearly-completed national projects, according to government officials and an official document seen by EnterpriseAM.

What is the money for? It’s mostly about rail. The ministry is prioritizing wrapping up six electric and monorail projects, including the recently piloted New Cairo line, while launching six new metro lines. Funding will also cover the second and third lines of the high-speed rail network and upgrades to 13 existing metro lines.

Digitizing travel

Cairo International Airport will roll out a digital visa-on-arrival system by August, allowing travelers to pay online to receive a digital QR-code visa for instant scanning upon arrival, according to a statement. The system allows travellers to apply to visas up to 48 hours before arrival and will be gradually introduced to other airports.

Who’s behind it? Homegrown cybersecurity and digital solutions company Cyshield will carry out the project and the National Bank of Egypt and Banque Misr will handle operations.

PSA-

WEATHER- It’s another hot one in Cairo, with the mercury hitting a high of 39°C and a low of 21°C, according to our favorite weather app.

It’s much cooler in Alexandria, with a high of 28°C and a low of 18°C.

And over the weekend, expect to see more tolerable weather in the capital and even cooler weather for our friends on the Mediterranean.

In a market defined by geopolitical risk, inflation, currency volatility, and declining interest rates, knowing how to manage your money has never been more important, and yet few people are really good at it.

The default in Egypt has traditionally been to dollarize, buy real estate, or stash your extra cash in a high-yield certificate of deposit, but that playbook is dying.

With an illiquid real estate market, the era of ultra-high-yield deposits coming to an end, and a rapidly expanding ecosystem of digital investment options, investors are looking for new, smarter opportunities.

In this four-part series, EnterpriseAM Money Matters will walk you through smart personal finance decisions regardless of your age, income, or starting point.

Coming straight to your inbox. Stay tuned.

The big story abroad

The highly-anticipated Trump-Xi meeting is happening as we’re pressing send this morning. The meeting is expected to see President Donald Trump ask his Chinese counterpart to “open up” the world’s second biggest economy to US investment. The US side is also expected to press Beijing to pressure Iran to “walk away from what it is doing in the Gulf,” Reuters said, citing comments by US Secretary of State Marco Rubio.

It’s official: The US Senate has confirmed Kevin Warsh as the next head of the Federal Reserve, taking over from outgoing chief Jerome Powell, whose term officially ends this Friday. Warsh, a longtime advocate for rate cuts, will take over during a period of high inflation and internal dissent in the Fed. We dive deeper into upcoming Fed moves and what they could mean for the region in this morning’s Planet Finance, below.

Two blockbuster IPOs are the latest sign that the AI hype is alive and well, highlighting the strong and ongoing appetite investors have for AI-focused companies. AI chipmaker Cerebras Systems raked in USD 5.5 bn in its IPO, bringing its value to roughly USD 40 bn, while the IPO of Blackstone’s newly-formed Digital Infrastructure Trust raised USD 1.75 bn, which will go towards buying data centers to support AI computing.

The future of private credit is once again making headlines after former Securities and Exchange Commission chair Jay Clayton said that there is no evidence that the US private credit sector suffers “excess leverage.” The comments follow heavy losses in the sector, fueled by fears that AI disruption could cripple the debt-heavy software firms it supports.