Egypt, Saudi Arabia in final stages of trials for 3 GW electricity interconnection

Good morning, everyone. Gaps are being filled this morning, with one story about the government filling in the fine print on a tax that’s already in law, and another about private capital filling in a space the public market hasn’t.

The natural gas tax story is all about mechanics. The government scrapped the VAT exemption on gas back in June, but it wasn’t clear who would actually write the check. Now we know it’s the EGPC that will handle the paperwork and settlements, meaning nothing changes for household gas bills.

RMBV’s North Africa Fund III has closed six agreements, with seven or eight more in the pipeline toward an investment portfolio of 10-12 companies. Managing Partner Ahmed Badreldin tells us the fund is designed to back founders through to public market exits, and the EGX is explicitly part of the plan.

But first, a programming note: EnterpriseAM Egypt is off tomorrow as we mark the Prophet’s Birthday (Mawlid Nabawy). Enjoy the long weekend — we’ll be back in your inboxes on Sunday morning.

*** A QUICK NOTE FROM THE AUDIO TEAM- Morning Drive is taking a summer publication holiday today, Tuesday 25 August, and tomorrow Wednesday, 26 August. We’ll be back in your feeds on Sunday 30 August. In the meantime, you can check out our other show Making It, an hour where the founders, CEOs, investors, and policymakers making the biggest decisions in our region show their work and talk about what’s next. You can find it on Apple Podcasts, Spotify, Anghami, and YouTube.

Decoding AI with Tarek Assaad: Past the doom and gloom, what the heck is actually going on with AI?

On this episode of Making It, Tarek Assaad, Managing Partner at Algebra Ventures, joins Patrick to decode the latest in AI.

This is an episode for both the novice and the pro, about what we should make of the recent technological breakthroughs, and what we’re yet to find out.

Listen to the episode on: Apple Podcasts | Spotify | Anghami | YouTube

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Power trading, almost

Egypt and Saudi Arabia are in the final stages of technical and operational trials on their 3-GW electricity interconnection, with the results of precision voltage, frequency, and other technical measurements set to determine the timing of commercial operation, a government official tells EnterpriseAM.

Pre-operation trials are expected to conclude by the end of August, the official says. Coordination meetings between the two sides are underway, following an easing in regional tensions, to verify compliance with technical standards and confirm that the Phase 2 works have left both grids ready for operation, the source said. A government document seen by EnterpriseAM says that Phase 2 was completed in 1Q 2026. Full-capacity operation would allow the two grids to exchange up to 3 GW of power, in line with their differing peak-demand timings. Full operation is expected in September, according to an unnamed government official.

The project: The USD 1.8 bn project, first floated in 2012, runs on 500-kV high-voltage direct current (HVDC) technology, built for moving large amounts of power over long distances with minimal losses. It links Egypt’s Badr converter station to Saudi Arabia’s East Madinah and Tabuk stations via roughly 1.4k km of overhead lines and subsea cables crossing the Gulf of Aqaba.

The goals: Egypt is leaning on the link — its largest interconnection project to date, and the region’s first large-scale HVDC line — to cement itself as a regional power-trading hub, alongside existing links with Sudan, Libya, and Jordan, and proposed interconnection projects with Greece and Cyprus, including GREGY. There is also a proposed subsea cable with Jordan that could eventually facilitate exports onward to Iraq, Syria, and Lebanon. Egypt has invested around EGP 965 bn in electricity generation, transmission, and distribution over the past decade, pushing installed capacity to around 60 GW against a summer peak load of slightly over 40 GW.

BACKGROUND- We first flagged this project in 2021, when it was moving forward with signed EPC contracts and the full link was slated for 2025. Since then, the launch date has slipped repeatedly: PM Madbouly targeted April 2026 during his site visit in October, and Electricity Minister Mahmoud Esmat said in February it would take place “within the coming weeks” — and as we noted two weeks ago, it had slipped again to the end of 2026.

What’s next? A government document seen by EnterpriseAM sets electricity-export targets of 300 MWh to Jordan and 250 MWh to Libya for the remainder of the fiscal year. Egypt is also in talks with Jordan on eventually raising interconnection capacity to 2 GW, while readiness studies are underway ahead of resuming work on the Sudan interconnection, which the government aims to expand to 25 MW by end-June 2027.

Looking for int’l partners: Egypt is reportedly preparing a tender to select an international firm to ensure the subsea electricity cable is secure, the Arabic press reports, citing an unnamed official. Saudi Arabia is launching a separate tender for an international consultant to oversee the cable’s maintenance.

Solar meets desalination

UAE-based renewable energy developer Amea Power is discussing potential investments in solar-powered water infrastructure and desalination with the Housing Ministry, according to a ministry statement. The talks, held in coordination with the Electricity Ministry, focused on using solar plants to power drinking-water and wastewater-treatment facilities, as well as road infrastructure in new cities. The two sides also discussed potential cooperation on seawater desalination plants. No specific projects, investment tickets, or timelines were announced.

There’s a localization angle too: The talks covered the potential local manufacturing of supplies and components for desalination plants, part of a broader government push for local content. The Housing Ministry signed an MoU in April with China’s CITIC Construction and Income to localize desalination membrane manufacturing.

REMEMBER- The government was reported to be in advanced talks with Amea Power to develop three seawater desalination facilities with a combined capacity of up to 300k cbm per day. Two would sit on the Mediterranean coast and one on the Red Sea, with Amea expected to fund, design, build, and operate them.

Why it matters: The government is turning to desalination to support coastal cities and new urban developments as the Nile-dependent freshwater supply comes under more pressure. But desalination and wastewater treatment are power-hungry, so pairing new water capacity with dedicated solar generation is how you add that load without leaning harder on the grid.

GlobalCorp agreement on hold

The Global Paradigm School loan scandal is now threatening to spill over into the financing and M&A plans of GlobalCorp, the non-bank financial-services company connected to the incident. The European Bank for Reconstruction and Development (EBRD) has paused negotiations over a potential USD 20 mn financing package for GlobalCorp, while talks for a sale of the company to a group of local and foreign investors — in a transaction that we reported in May could be valued at USD 200 mn — have also stalled, Al Arabiya reports, citing sources it says are familiar with the matter.

BACKGROUND- The news comes one day after the Financial Regulatory Authority referred a consumer-finance company to the public prosecution and imposed a one-month ban on signing new financing contracts. The regulator has said the case concerns allegations that Global Paradigm School used parents’ national ID data to arrange unauthorized loans totaling EGP 319 mn across 619 clients and 839 contracts, and that all resulting financial and credit obligations have been canceled.

About the company: GlobalCorp for Financial Services is an Egyptian non-bank financial institution founded in 2015, offering leasing, factoring, consumer finance, and mortgage solutions, per its website. A consortium of Amethis, SPE Capital, and the EBRD acquired a 90% stake in the company for EGP 914.7 mn in 2022, buying out founding investors Ezdehar and the Sanad Fund for MSME, while founder and CEO Hatem Samir retained the remaining 10%. Ollin Consumer Finance — the unit referred to the public prosecution — operates as GlobalCorp’s consumer-finance arm.

Data point

USD 125 mn — that was the value of petroleum products Egypt imported from Libya in the first five months of 2026, compared to no recorded imports in the same period last year, Al Arabiya reports, citing Capmas data. The Oil Ministry turned to Libyan crude last April — via state-owned EGPC — after Kuwaiti oil flows were disrupted when the Strait of Hormuz closed. The fuel bill alone pushed total Egyptian imports from Libya to USD 159 mn during the period, up from just USD 6.6 mn a year earlier.

The jump shifts a trade relationship that usually runs almost entirely Egypt’s way. Egyptian exports to Libya hit USD 1.5 bn in 2025 against USD 40 mn in imports, with Libya topping Egypt’s African Union (AU) export destinations. Libya, on the other hand, did not rank among Egypt’s top eight AU suppliers.

Destination Sahel Issue IV, the final issue in the series, drops today, and we’re exploring how the North Coast could be more than a summer story.

Living in Sahel year-round is moving from a seasonal idea to a serious question; an industrial push is reshaping the Coast’s economic base, and Egyptian homebuyers are weighing Sahel against Dubai, London, and other Mediterranean markets for where to put their money.

In this issue, we get into what it would take for Sahel to work beyond the summer, how industry fits into the Coast’s next chapter, and the numbers behind the Sahel-vs-everywhere debate.

Coming straight to your inbox today.

PSA-

WEATHER- It’s another hot day in Cairo that reminds us summer is not done with us yet, with a high of 38°C and a low of 25°C, according to our favorite weather app.

It’s a touch cooler in Alexandria, with a high of 33°C and a low of 24°C.

And over the extended weekend, expect more summer heat in the capital and relatively milder, though still humid, weather for our friends on the Mediterranean.

The big story abroad

Taking top billing today are Canada’s retaliatory tariffs on US goods, featuring levies of up to 50% on USD 20 bn worth of imports from its southern neighbor. Effective 8 September, the tariffs target steel, dairy, and agricultural equipment and match Washington’s rates on Canadian goods.

In other geopolitical news: The Kurdish-led Syrian Democratic Forces have been dissolved as their fighters integrate into the Syrian military, the group’s leader Mazloum Abdi said. With US backing, the group helped combat the Islamic State and previously controlled parts ​of the country. The move signals a key breakthrough in President Ahmed Al Sharaa’s efforts to unite Syria’s factions.

Meanwhile, in the tech world: SpaceX aims to build a USD 100 bn spaceport in Louisiana, spanning 125k acres and marking the company’s second private launch site. SpaceX plans to begin building the base next year, targeting its initial rocket launches for 2029.

Speaking of tech, Anthropic is expected to inform investors that its total addressable market exceeds USD 30 tn, surpassing the USD 28.5 tn projection set by Elon Musk’s rocketmaker. The startup’s figure accounts for the full scope of its work that could be accomplished by AI models, and calculates the gains available if a product or service achieves 100% market share.

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: EnterpriseAM’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We unpack how revenues for Egypt’s top developers are growing, even as the market producing these sales is shrinking.