More interconnection to come

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What We're Tracking Today

Are we witnessing the death of the green hydrogen industry?

Good morning, folks. We’re wrapping up what has been a busy week with a brisk issue. Leading the news well today is the latest on our regional electricity interconnection projects, with a source letting us in on the government’s plan to significantly boost its interconnection capacity by the end of next year. We also have news of a new real estate project, after regional real estate developer Methaq Arab Group announced plans for a EGP 60 bn mixed-use development.

PSA-

WEATHER- Cairo is in for another sunny day, with a high of 35°C and a low of 24°C, according to our favorite weather app.

Alexandria will be looking at a high of 31°C and a low of 24°C.

WATCH THIS SPACE-

Are we witnessing the death of the green hydrogen industry? Global demand for green hydrogen has been lagging far behind expectations, leaving projects without buyers, Emirati state-run renewables giant Masdar CEO Mohamed Jameel Al Ramahi told Bloomberg, explaining why the company will be shifting its focus away from green hydrogen and toward powering AI.

High production costs have stifled demand, forcing companies around the world to scale back or cancel projects while raising fresh doubts over the industry’s long-term viability. “Today, green hydrogen is under pressure and the market is shrinking. A lot of people who went into this venture are out,” Al Ramahi said.

This will surely put a dent in our plans: The Madbouly government has harbored ambitions to transform Egypt into a center for green hydrogen production for some time now, with its sights set on becoming a regional hub by 2026 and a global hub by 2030. Last year, the government launched the National Low-Carbon Hydrogen Strategy, which targets 5-8% of the global hydrogen market by 2040.

What’s next? With the future of the industry in question, we have a feeling that some of the green hydrogen projects we heard of over the past few years may never see the light. However, we are yet to hear anything about the Madbouly government revising its plan to become a green hydrogen hub in the years to come.

REMEMBER- Masdar is working on a local green hydrogen project. Masdar, alongside Infinity, Hassan Allam, and global energy giant BP signed an agreement last year to set up a USD 14 bn green hydrogen project in the Suez Canal Economic Zone. The project is expected to be fully operational in ten years.

DATA POINT-

Natural gas production fell 16.4% y-o-y in June to 3.4 bn cubic meters, down from 4.09 bn cubic meters, Al Arabiya reports, citing recent Jodi data. Output also slipped 3.6% m-o-m in June. Meanwhile, over 1H 2025, production dropped nearly 19% y-o-y, extending the downward trend.

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THE BIG STORY ABROAD-

The international business press has a small handful of stories that are leading the conversation this morning, including a rundown of the minutes from the US Federal Reserve’s last Federal Open Market Committee meeting.

Federal Reserve policymakers are equally concerned about the twin risks of rising inflation and falling employment levels, but ultimately decided that inflation is the greater risk of the two, the minutes from its July meeting indicate. The meeting came two days before the Labor Department released data showing the unemployment rate rose in July, followed by a revision to employment estimates that has undermined the notion that the US’ job market remains strong. (CNBC | Reuters | Bloomberg)

Meta is reportedly freezing hiring in its AI division as the company reorganizes the division’s structure, the Wall Street Journal reports. The freeze, which came into effect last week, comes after Meta hired more than 50 employees for its AI efforts, fueling some concern over the cost of its superintelligence buildout.

REGIONALLY- Israel is stepping up its offensive in Gaza, confirming yesterday that it has “begun the preliminary operations and the first stages of the attack on Gaza City.” The Israeli army is now “holding the outskirts of Gaza City,” marking a step towards implementing a widely criticized plan to take over the city. This came as Israel called on 60k reserve troops to join the war, even as it is considering its response to the latest ceasefire proposal. (Reuters | Bloomberg)

Egypt targets 3.9 GW in regional power interconnections by 2026

Egypt plans to boost its electricity interconnection capacity to 3.9 GW by the end of 2026, up from 790 MW last year, a government source told EnterpriseAM. The increase will be backed by the completion of multiple regional interconnection projects.

The Egypt-Jordan-Iraq interconnection, which passes through Syria and Lebanon, is expected to reach 550 MW next fiscal year, up from the 500 MW originally planned. Capacity is set to rise to 2.2 GW by the fiscal year 2029-2030 and to 2.7 GW at a later stage. The expansion of this line, along with higher capacities on the Egypt-Jordan line, awaits financing from international institutions to cover equipment costs, according to our source.

REMEMBER- Electricity Minister Mahmoud Esmat said last year that the government was exploring the possibility of exporting electricity to Syria through its interconnection link with Jordan.

The USD 1.8 bn, 3 GW Egypt-Saudi interconnection is also moving ahead, with an Egyptian delegation recently concluding a one-week visit to the Kingdom to review progress, according to our source. Meanwhile, at home, construction is being finalized on the conversion station in Badr City, a key pillar of the project, which is expected to enter trial operations this fiscal year. Trial operations of the interconnection were originally slated for April.

The Egypt-Greece Interconnector (GREGY) will add 1 GW to its capacity next year as the first phase of an agreement covering 3-6 GW, according to the source. Esmat has recently met with the head of Greece’s Copelouzos Group — which is implementing the interconnection project — to follow up on the updates and expand cooperation on renewables.

There’s more: Egypt will also boost its interconnection with Libya to 150 MW next year, the source added.

The government aims to cement its position as a regional energy hub through electricity interconnection. Private sector participation will be central, the source said, noting that the private sector has already invested USD 3.6 bn in renewables.

Regional real estate player Methaq Arab Group to establish its first EGP 60 bn Egypt project

Real estate developer Methaq Arab Group (MAG) will launch its first project in Egypt, an EGP 60 bn East Cairo development, according to a press release.

The mixed-use project will include residential, hospitality, and commercial components, Regional CEO Nour El Sorougy said.

What they said: “We bring more than 10 years of experience in Abu Dhabi, where we have developed over 25 successful projects. Today, we are entering Egypt to replicate those successes in a market defined by strong demand and continuous growth,” El Sorougy said.

Unfamiliar with MAG? The developer was “established with Emirati expertise and Saudi–Egyptian capital” and plans to use its Egypt project to “build a joint Arab entity capable of competing both regionally and globally.”

Egypt, Japan agree to deepen green energy, education cooperation

Egyptian-Japanese cooperation in green hydrogen? The Suez Canal Economic Zone inked an MoU with the Tokyo Metropolitan Government’s Bureau of Industrial and Labour Affairs to boost cooperation between the two sides in the field of green hydrogen, according to a cabinet statement. The MoU will focus on the environmental and economic aspects of the technology “through the exchange of relevant expertise, knowledge, and information, stimulating market demand and supporting its various applications.”

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

More education agreements were also inked between the Education Ministry and the Tokyo Metropolitan Government, including one that covered training programs for teachers and support for students with special needs, according to a separate statement from the cabinet. Another agreement was signed to expand technical and applied schools in Egypt — with an emphasis on agri-education — to strengthen Egypt’s workforce with skills attuned to local and international market needs.

The agreements are the latest in a long list of agreements and letters of intent inked between the two sides during Prime Minister Moustafa Madbouly’s visit to Japan, where he also pitched a Japanese industrial zone in Egypt.

Two Chinese players want to locally manufacture their phones in Egypt

INVESTMENT WATCH-

Two Chinese smartphone makers are looking to locally manufacture their phones in Egypt under a six-month pilot investment, which will see HKEX-listed Coolpad and KXD invest EGP 100 mn in an experimental first stage, Al Mal reports, citing unnamed industry sources. The two companies will produce mid-range phones with a local component ratio reaching 45%.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The two companies will take stock of the experiment six months in — and hopefully follow this with some more investment news. Both companies have a particular interest in establishing production facilities in Egypt due to the country’s position as an entry point to African markets, according to the sources.

PHARMA

Indian pharma player BDR Group is in talks to establish a facility for biologics and cancer meds in Egypt, according to a Health Mini stry statement. Future Pharma Industries, an SPE Capital Partners affiliate, was also part of the discussions. Health Minister Khaled Abdel Ghaffar directed stakeholders to set a clear timeline for execution and expedite the registration of BDR’s products with the Egyptian Drug Authority.

EDUCATION-

Alexandria University will open its Abu Dhabi campus at the start of the 2025-2026 academic year, Emirati state news agency Wam reports. The new campus will offer programs in health, engineering, computer science, business, and the humanities, alongside professional courses and joint degrees with international universities. Preparations for the launch are currently underway.

MANUFACTURING-

Fresh Electric will invest EGP 250 mn to establish a new water pump factory in 6th of October, Al Borsa reports. The factory will initially focus on meeting local market needs with future plans to expand into exports. The company is also planning to invest an additional EGP 200 mn to build three feeder factories.

AUTOMOTIVE-

GB Auto has acquired the rights to distribute China’s Deepal electric vehicles in the local market, and has introduced its first two models, the S07 and S05, Al Borsa reports. The company has already set up a dedicated showroom for Deepal at Mall of Arabia and will initially provide after-sales services through its Abu Rawash center.

ARTIFICIAL INTELLIGENCE-

Meska AI’s newly-launched investment arm Meska Ventures made its first investment, with USD 150k funneled into generative engine optimization startup Zaher AI, the Cairo-based artificial intelligence solutions firm said in a statement seen by EnterpriseAM. Through its investment arm — modeled after global startups accelerator giant Y Combinator — Meska aims “to position Egypt at the heart of the global AI map.”

Investors warn of fiscal dominance as rising sovereign debt fuels pressure on central banks

A growing chorus of investors are warning that central banks are being pressured to keep rates artificially low, which former IMF Chief Economist Kenneth Rogoff described as a new period of “fiscal dominance” in comments to the Financial Times. Behind the pressure are mounting government borrowing costs for many of the world's largest economies, which have pushed some countries to press for monetary policy changes to tackle often record sovereign debts.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

How Trump’s attacks on Fed Chair could impact interest rates trajectory: Renewed attacks by US President Donald Trump on Fed Chair Jerome Powell following last week’s inflation data are fueling speculations that US monetary policy will remain looser than required. This sentiment was emboldened by the appointment of rate-cut advocate Stephen Miran to the Fed board.

Short-term US Treasury yields fell last week in anticipation of cuts, while 30-year yields rose, a move Capital Economics analysts called “an unusual response to a relatively uneventful data release.” The analysts added that the market may be pricing in what would happen “if Powell were actually removed or the White House took other steps to exert more control of monetary policy, in particular nominating a new Fed chair seen as a stooge for the president.”

The tension between short-term and long-term rates in the US is mirrored globally. The yield gap between two-year and 30-year Treasuries is now the widest since early 2022, while in the UK, 30-year gilt yields hover near 5.6% — their highest in over 25 years. Even in fiscally conservative Germany, 30-year borrowing costs have crossed the 3% mark for the first time since 2011. Investors are watching whether central banks like the Bank of England will scale back bond sales next month amid concerns that quantitative tightening could further drive up borrowing costs.

The OECD expects sovereign borrowing by developed economies to hit USD 17 tn this year, up from USD 16 tn in 2024 and USD 14 tn in 2023, according its Global Debt Report 2025 (pdf). That rising debt burden is clashing with efforts by central banks to normalize their balance sheets after years of quantitative easing. Economists warn that as debt-servicing costs rise, some governments could switch to issuing more short-term paper, increasing exposure to market swings and complicating monetary policy. “The volatility makes it harder to own the long end, and therefore harder to issue there,” said Jupiter Asset Management fixed income head Matthew Morgan.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning as traders stand steady in anticipation of Powell’s speech at the Jackson Hole Symposium. Japan’s Nikkei and the Hang Seng are both in the red, down 0.4% and 0.1% respectively. The Kospi and the Shanghai Composite are both up, looking at gains of 0.9% and 0.3%, respectively.

EGX30	35,732	-1.0% (YTD: +20.2%)
USD (CBE)	Buy 48.54	Sell 48.68
USD (CIB)	Buy 48.55	Sell 48.65
Interest rates (CBE)	24.00% deposit	25.00% lending
Tadawul	10,878	0.0% (YTD: -9.6%)
ADX	10,204	-0.1% (YTD: +8.3%)
DFM	6,122	-0.5% (YTD: +18.7%)
S&P 500	6,396	-0.2% (YTD: +8.7%)
FTSE 100	9,288	+1.1% (YTD: +13.6%)
Euro Stoxx 50	5,472	-0.2% (YTD: +11.8%)
Brent crude	USD 66.84	+1.6%
Natural gas (Nymex)	USD 2.75	0.0%
Gold	USD 3,390	0.0%
BTC	USD 114,199	+0.9% (YTD: +22.1%)
S&P Egypt Sovereign Bond Index	897.16	+0.2% (YTD: +15.4%)
S&P MENA Bond & Sukuk	148.33	+0.2% (YTD: +6.0%)
VIX (Volatility Index)	15.69	+0.8% (YTD: -9.6%)

THE CLOSING BELL-

The EGX30 fell 1.0% at yesterday’s close on turnover of EGP 5.4 bn (2.5% above the 90-day average). Local investors were the sole net buyers. The index is up 20.2% YTD.

In the green: EFG Holding (+4.1%) and Misr Cement (+2.4%).

In the red: Arabian Cement (-6.0%), Juhayna (-5.2%), and Credit Agricole (-3.4%).

My Morning Routine: Mohamed Mahlab, CEO of Rowad Modern Engineering

Mohamed Mahlab, CEO of Rowad Modern Engineering: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Rowad Modern Engineering CEO Mohamed Mahlab (LinkedIn).

My name is Mohamed Mahlab, and I’m still a civil engineer at heart. That’s where my roots and my passion lie.

I’m in charge of Rowad Modern Engineering, a company I had the pleasure of co-founding in 1998. What started in a 100 sqm office has grown into a regional company impacting mns of lives. My role is to chart the course and empower my team to deliver. It’s not to manage every detail, but to ensure the destination is clear.

We play a big role in the construction industry in Egypt and Africa. We believe Africa’s future should be built by African hands and minds. One of our main aims is to be one of the greatest builders on the continent and to really contribute to the sector in Africa.

We've had the privilege of working on projects outside of Egypt since 2006 and of being a key player in many African markets. In every country, we build more than infrastructure — we build local capability and potential. We started working in Saudi Arabia two years ago, we’ve recently tapped into the UAE, and we’re looking forward to expanding into other countries.

Our strategy now focuses on the year 2030. More than 75% of volume will be generated from international projects and the rest from the local market. The team has put together a very clear business plan and strategy for the next five years, and it is communicating it across the whole company to see how each pillar of the company will contribute toward achieving this. To support this, we are transforming our culture from central control to empowered accountability.

The industry is seeing a lot of transformation in terms of technology. The construction industry is a very old industry — thousands and thousands of years old. This used to mean that movement and change were very slow, but nowadays, with technology, digitalization, and their integration into business, a lot is changing.

We’ve been very lucky that we started our digital transformation many years ago. I think we are on a very good road toward becoming a 100% digitalized company by the end of 2025. It’s a continuous process of looking for issues and seeing how to make systems more efficient with technology.

Some people think it’s a threat to workers or jobs, but I disagree. Using technology, instead of using all your time to make a cost report or get data, your role now is to make decisions. It also gives you the data that you need at the right time.

I’ve completed 24 Ironman races, and it’s something I've been doing for 10 years now, along with marathons. I wake up very early and start my day at around 5:30am. Some days I run, others I swim, and some days I stay on the bike. Other times, I integrate this with hitting the gym. Commitment is non-negotiable; whether in Cairo or abroad, my training is part of who I am. I usually finish my training at 7:45am or 8am and get ready to put on a suit to go to work.

My passion for sports changed everything for me. You know that nothing is impossible, but you have to work for it — it’s all about discipline. To do an endurance sport like Ironman, you have to train a lot to be able to run a race of 12 or 13 hours. It taught me that discipline beats motivation, and that’s exactly how we run the company. It also teaches you that if you go too fast, you will not reach the finish line. It’s the same in business — growth must be paced and sustainable.

This is applicable to anything in life, whether it's work or other responsibilities. You have to always respect others, appointments, and your time — this is the only way to earn others’ respect. I always tell my people that we need to know where we want to go and to see the finish line, even if at times the road may change or have bumps. We also need to control our speed, because one cannot grow more than they can sustain.

I stay focused and organized by writing everything down. I take notes in meetings and put them in my office to make sure I'm focused on resolving these problems. I’m also surrounded by a very good and young team, who not only help me but also teach me.

I always do my best to spend as much time with my family, talk with my sons, who I learn a lot from, and give back some support to my wife, who stands behind everything I have achieved.

The best advice I’ve ever received was from my father, which is to help others without expecting anything in return. I saw him live by it, and it shaped my own path. When people reach out, I always try to help when I can. I help my team, friends, and others — and this gives me real happiness.

CALENDAR

AUGUST

28 August (Thursday): Monetary Policy Committee meeting.

Mid-August: Launch of electronic platform to register Old Rent Law tenants.

Tourism Development Authority to waive late payment penalties for land purchases if full installments are paid

Late-August: Deadline for cement factories to restart production.

SEPTEMBER

8-11 September (Monday-Thursday): EFG Hermes London Conference takes place in the British capital.

9-11 September (Tuesday-Thursday): The International Exhibition for Paper, Corrugated Board, Paperboard and Tissue Paper Industries — PAPER-ME — takes place at the Egypt International Exhibition Center.

15 September (Monday): IMF to hold its combined fifth and sixth reviews of Egypt’s USD 8 bn EFF arrangement.

24-27 September (Wednesday-Saturday): Cityscape Egypt 2025, Egypt International Exhibition Center.

30 September (Tuesday): The Egypt-South Korea Economic Cooperation and Partnership Forum.

The Egyptian-Moroccan Business Council to send a delegation of 23 local companies to Rabat.

The Engineering Export Council of Egypt will ship a commercial delegation to Russia to ramp up exports to European markets.

Egypt Education Platform (EEP) to launch two new schools in Alexandria and Somabay.

Egypt Otsuka’s nutritional products factory in Tenth of Ramadan to begin operations, with exports to Gulf countries expected by January 2026.

OCTOBER

1 October (Wednesday): Applications for alternative housing for old rent tenants will open through an online platform or at post offices nationwide.

2 October (Thursday): Monetary Policy Committee’s sixth meeting.

7 October (Tuesday): The 2025 EnterpriseAM Egypt Forum.

7-8 October (Tuesday-Wednesday): HACE-Hotel Expo, Egypt International Exhibitions Center.

7-9 October (Tuesday-Thursday): EgyMedica Exhibition, Cairo International Convention Center.

12-16 October (Sunday-Thursday): Cairo Water Week, Cairo.

19-20 October (Sunday-Monday): Egypt to host the fifth edition of the Aswan Forum.

19-22 October (Sunday-Wednesday): Arab African Investment and International Cooperation Summit.

23-25 October (Thursday-Saturday): Stone Africa Expo, Cairo International Conference Center.

October: The third iteration of the Export Smart Exhibition and Conference.

Mid-October: Capmas to publish the findings of its 2023-2024 income and expenditure survey.

NOVEMBER

16-19 November: Cairo ICT 2025, Egypt International Exhibition Center

20 November (Thursday): Monetary Policy Committee meeting.

November: Egypt to join the EU’s Horizon Europe research and innovation program.

DECEMBER

1-4 December: Egypt Defence Expo (EDEX), Egypt International Exhibition Center.

25 December: (Thursday): Monetary Policy Committee meeting.

EVENTS WITH NO SET DATE

Mid-2025: EGX launches sustainability index.

3Q 2025: Nasr Automotive begins locally manufacturing passenger cars.

3Q 2025: Polaris Parks to finalize contracts for two new industrial zones in the new capital and Sadat City.

Mid-2025: The Administrative Capital for Urban Developments to roll out the second phase of offering industrial plots to investors

2H 2025: Potential visit by Chinese President Xi Jinping to Egypt

4Q 2025: The beginning of construction works on China’s State Grid two solar projects.

4Q 2025: GB Auto starts assembling one of China’s Great Wall Motor models in 4Q 2025.

4Q 2025-1Q 2026: Kasrawy Group to launch first Avatr EV models in Egypt.

2025: The InterAcademy Partnership assembly.

2025: Nile Basin States Summit, Cairo, Egypt.

2025: Release of the government’s Startup Charter document.

Before 2025-end: The government will launch two ro-ro shipping lines with Saudi Arabia and Turkey.

2026

Early 2026: Passenger operations on the New Administrative Capital–Nasr City monorail scheduled to begin.

1Q 2026: Trial operations for the Ain Sokhna–Sixth of October section of Egypt’s first high-speed rail line scheduled to begin.

1 January: European Union’s Carbon Border Adjustment Mechanism (CBAM) to fully come into effect.

15 March 2026: IMF to hold its seventh review of Egypt’s USD 8 bn EFF arrangement.

May 2026: End of extension for developers on 15% interest rates for land installment payments

15 September 2026: IMF to hold its eighth review of Egypt’s USD 8 bn EFF arrangement.

2H 2026: Operations at Deli Glass Co’s new USD 70 mn glassware factory kick off.

2027

20 January-7 February: Egypt to host the African Games.

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings for 2027.

End of 2027: Trial operations at the Dabaa nuclear power plant expected to take place.

September 2028: First unit of the Dabaa nuclear power plant begins operations.

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