Good morning, all. We’re nearing the end of the week and the news cycle shows few signs of slowing down, with Israel’s escalating war on Iran and plenty of local business and economic news closer to home.

In today’s issue, we’ve got encouraging news of new gas wells set to go online next month, big-ticket PPPs in the works, a new Hyatt hotel, and more. We’re full as it is, so let's jump in.

PSA-

WEATHER- The cool down continues in Cairo today, with a high of 33°C, a low of 23°C, and partly cloudy skies, according to our favorite weather app.

Although it's a few degrees cooler in Alexandria than yesterday, with a high of 30°C, a low of 19°C, and partly cloudy skies.

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EGP WATCH-

The EGP continued to appreciate against the greenback yesterday for the second consecutive day, despite continued escalations in the conflict between Iran and Israel.

The EGP strengthened by EGP 0.10 and more across state and private banks by the end of trading yesterday, while interbank USD trading returned to normal levels, a source in the banking sector told EnterpriseAM. The past two days saw transactions totaling USD 1.3 bn, in addition to higher-than-usual trading volumes compared to last week — all of which took place to meet demand for foreign investors’ exits from the secondary market and the EGX, the source said.

ALSO- Egypt paid some USD 1.5 bn in bond repayments by the end of last week, despite current developments that may hinder Egypt's plans to move forward with diversifying its public debt instruments and issuing new sovereign sukuk locally or abroad, our source added, without disclosing how the bond repayment was secured.

BUDGET WATCH-

The House approved the EGP 6.8 tn general state budget for FY 2025-2026, representing around a third of the country’s GDP. The allocation consists of EGP 4.6 tn in expenditures, EGP 2.1 tn for local and foreign debt servicing, and EGP 102.8 bn worth of financial asset holdings. The government aims to raise some EGP 3.1 tn in revenues in the upcoming fiscal year, as set forth in the draft budget submitted to the House in April.

REMEMBER- Interest spending is set to make up the lion’s share of the government’s total expenses at EGP 2.3 tn, with subsidies coming in second at EGP 742.5 bn, and wage payments standing at EGP 679.1 bn.

Where will the income come from? Taxes make up the bulk of next year’s revenue target at EGP 2.7 bn, grants account for EGP 9.5 bn, and other revenues are projected at EGP 455 bn.

AND- The budget shows that the state plans to borrow some EGP 3.6 tn — or 17.5% of GDP — in the next fiscal year, confirming the figure indicated in a government document seen by EnterpriseAM back in April.

WATCH THIS SPACE-

The Housing Ministry’s Social Housing Fund is looking to issue green bonds alongside a number of international institutions and local banks in a move to diversify funding sources and secure better terms, ensuring the sustainability and continuity of the program, according to a New Urban Communities Authority statement citing the fund’s CEO May Abdel Hamid as saying. Abdel Hamid did not specify the exact size of the issuance, or when it will be carried out.

THE BIG STORY ABROAD-

An increasingly hawkish Trump is continuing to dominate the news cycle, with the US president reiterating his calls overnight for an unconditional surrender — needless to say in all caps — and threatening to kill Iranian Supreme Leader Ayatollah Ali Khamenei and describing him as an “easy target.”

But the real and growing concern is if Trump decides to turn words into actions and formally join Israel’s war on Iran, potentially using its more advanced hardware to target deep underground facilities that the Israelis are unable to do. Pointing to the increased likelihood of the US’ direct involvement, Trump said the country’s patience was “wearing thin,” described how “we” have established dominance of Iranian airspace, and directed the forward deployment of the US air power. (Reuters | New York Times | Financial Times | Bloomberg | Guardian)

While the world’s attention turns to Iran, Israel’s starvation of Gaza and daily massacres have continued, the most recent of which saw 59 Palestinians slaughtered yesterday as Israeli tanks fired into crowds of people waiting for desperately needed food aid. “The people are dying, they are being torn apart, to get food for their children,” one eyewitness told Reuters. The killing of those seeking aid in what the UN describes as the “the hungriest place on Earth” has become a depressingly familiar story coming out of the besieged strip in recent weeks, despite the entire population of Gaza being at risk of famine.

Elsewhere in the strip, at least another 14 people were killed, bringing the day’s death toll to at least 73. But with the conflict now in its 20th month and developing events elsewhere taking away diplomatic and media focus, the relative silence on Gaza in recent weeks has been deafening. (Reuters | New York Times | Financial Times | Guardian)

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’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 break down the government’s electricity targets and the roadmap to achieving them.

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