The IDA opens its first tender under the new lease-to-own system for industrial land

Good morning, friends. We have two stories for you today about how Egypt is managing risk — broadly in its macroeconomic picture, and more narrowly with its oil pipelines — and a third on the latest push in the local wind power industry.

The IMF staff report is the deeper read. The seventh review cleared USD 1.8 bn earlier this month, but the fine print reveals some notable concerns: gross financing needs are expected to peak at around 42% of GDP this fiscal year and banks are carrying sovereign exposure at the second-highest level in the region.

The EBRD is plugging USD 192 mn into the 900 MW Shadwan wind farm by Scatec in Ras Shukeir. The move is part of a larger wind power buildout Scatec and EBRD have been pursuing for a while, dovetailing into Egypt’s power ambitions.

The Libya pipeline story is the less expected move. Egypt and Libya are nearing an agreement on an 800 km oil pipeline connecting Tobruk with Alexandria, a project that was originally proposed in 1997 but was never built. Disruptions in the Strait of Hormuz have brought it back to the table.

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Rent, operate, own

The Industrial Development Authority (IDA) opened its first tender under the new lease-to-own system for industrial land yesterday, offering 540 plots spanning more than 5.7 mn sqm across 20 industrial zones in 15 governorates, the authority said in a statement. Investors have until 31 August to apply electronically through the Egypt Industrial Hub, with results promised 15 days later.

The goal is to prevent manufacturers from tying up capital in land before they even start producing. Under the rules, investors can lease plots for seven to 21 years at an annual rent of 5% of the land’s price. If they do not apply for ownership, the rental value will undergo a formal reassessment at the seven- and 14-year marks to keep things aligned with the market, IDA chief Nahed Youssef said. The rent also steps up by 10% annually.

The hook: Once a factory has completed one year of actual operations and secured its operating license, the investor can apply to buy the plot, with every EGP paid in rent deducted from the final purchase price. The investor then pays 25% of the remaining value upfront and settles the rest over three annual installments.

The new system sits alongside eight other land allocation tools, including direct ownership and usufruct arrangements. The plots on offer target pharma, automotive and engineering, electronics, chemicals, building materials, food processing, and textiles — the same priority sectors Industry Minister Khaled Hashem flagged in June as central to lifting non-oil exports from USD 48 bn to USD 100 bn by 2030.

Filling the tire gap

The government plans to tender a passenger and light-transport tire factory with an estimated USD 500 mn investment, according to a government document. The plant, planned for a 217-feddan site in 10th of Ramadan City under a public-private partnership, is under the purview of the Military Production Ministry.

Why it matters: The country needs roughly 500k tires a year but imports around 8 mn worth some USD 1.25 bn. Egypt, which has bus and truck tire plants, has no domestic passenger-car tire industry, according to Assistant Industry Minister for Strategic Industries Mohamed Zada.

IN CONTEXT- We have been tracking a wave of investment in tire manufacturing for over a year, but with a different sponsor. China’s Sailun broke ground on a USD 1 bn plant in Sokhna in 2025, and there has since been a wider cluster of Chinese tire investment — Linglong is eyeing a USD 2 bn export hub in Borg El Arab, and Zenith Steel is lining up a USD 300 mn component plant to supply them. However, these projects were geared toward export markets.

A clean split

The Cabinet has greenlit the demerger of state-owned textile giant Misr Spinning and Weaving, paving the way for its public offering. The new independent entity, named New Ghazl El Mahalla for Spinning and Weaving, will take over all active spinning, weaving, garment manufacturing, and finishing operations, according to a Cabinet statement. The demerged company — established by the state-owned Cotton, Spinning, Weaving, and Garments Holding Company — will also manage domestic and international cotton and textile trading.

We flagged this back in April: The head of the Cabinet’s State-Owned Enterprises Unit, Hashem El Sayed, told us that the textiles giant Ghazl El Mahalla could be split into two: one arm holding the upgraded factories for a potential listing or sale to a strategic investor, and another set aside for longer-term restructuring. New Ghazl El Mahalla is the first arm; once the split is complete and the new factories run at full steam, it is expected to emerge as the world’s largest spinning company by capacity, Ghazl El Mahalla Chairman Ahmed Badr said in July. The company is targeting a temporary EGX listing between July and September 2026, ahead of an actual share offering in FY 2026/27, Badr said.

ALSO- The Cabinet has approved a dedicated investment fund to restructure and refinance distressed factories, which will be established under the Industrial Development Authority as an Egyptian joint-stock company. The fund’s mandate is to make direct equity investments and take balance-sheet stakes in struggling or idle facilities to restore their operational health, targeting food processing, engineering, chemicals, textiles, ready-made garments, pharmaceuticals, and construction materials.

Setting the record straight

The Transport Ministry has said that the small cargo ship attacked by Yemen’s Houthis in Bab Al Mandab was not Egyptian-owned. Earlier reports suggested it might have been, but the ministry has said that the ship, named Tihama and operated by Blue Sea for Management Marine, is Tanzanian-flagged and owned by a Yemeni national and was not en route to Egypt.

PSA-

WEATHER- Nothing new here; it’s still hot in Cairo today, with a high of 36°C and a low of 25°C, according to our favorite weather app.

It’s breezier in Alexandria, with a high of 31°C and a low of 24°C.

The big story abroad

A key stumbling block in the regional war seems closer to being resolved, as Iran and Oman reportedly inch closer to hashing out shipping rules for the Strait of Hormuz. The two sides are working on a so-called “shipping map” to regulate traffic through the waterway while preserving each nation’s sovereignty. It is still unclear whether transit fees will be levied on shippers.

Meanwhile, strikes continue: Two Adnoc vessels were struck while transiting Hormuz on Thursday, while a third was struck on Friday. No injuries were reported.

Chipmaking giant Nvidia disclosed that it owns a USD 21 bn stake in SpaceX, held in around 123 mn shares, making it the firm’s sixth-largest investor, according to data from FactSet. Since SpaceX’s shares have fallen markedly since its June IPO, Nvidia’s stake would now be worth USD 17 bn.

AI misstep on Jane Street: New York-based quantitative trading firm Jane Street recorded a USD 15 bn loss tied to exposure to AI-focused hedge fund Situation Awareness, after being caught in last month’s AI sell-off. Jane Street disclosed the figure as part of an agreement to shift USD 11 bn in public debt to private investors. After accounting for the loss, the company brought in more than USD 40 bn in trading revenues.