A new industrial fund could be a boon for SMEs:The National Initiative for Developing Egyptian Industry (Ebda) and Cairo Financial Holding’s brokerage arm Cairo Capital Securities (CCS) plan to launch the country’s first specialized industrial investment fund this month. The new fund could help resolve problems for small manufacturing players, including access to financing — which continues to be an obstacle for manufacturers amid the current high-interest rate environment — and reducing Egypt’s import bill, according to several industry sources Enterprise spoke with.

REFRESHER- The Nile Fund for Industrial Investment — which was unveiled by Ebda and CCS earlier this month — aims to invest in all industrial sectors to ramp up exports and lower the country’s import bill. The fund will be launched on the EGX with an initial value of EGP 2.5 bn and a lifespan of 5-7 years. Ebda will invest EGP 200 bn over the next four years through its executive arm, Ebda, which is majority-owned by the Hayah Karima (Decent Life) Foundation, to help support existing industrial projects and fast-track the development of new ones. It also aims to create some 150k direct and indirect jobs over the course of four years.

What’s been accomplished so far: Since its launch in October 2022, Ebda has so far helped 23 projects worth EGP 62.5 bn in different sectors go live as a first phase, according to recent data. The second phase is set to include 24 projects.

More is coming in the pipeline: Ebda is expected to announce several new potential investment projects soon, with priority being given to hospitality, agriculture, and related industries due to their significant role in the economy, Ebda member Ahmed Badra told Enterprise.

How will the new fund drive investments in the industrial sector and improve access to financing? The initiative offers financing of up to EGP 50 mn, while also offering ready feasibility studies for potential investments, which helps to expedite implementation, Ebda member Ahmad Badra told Enterprise. Although the government launched a new EGP 120 bn subsidized loan program for manufacturers in freezones and agriculture and renewable energy companies, carrying a 15% interest rate last month, access to financing remains difficult for industry players, Badra said.

The market needs more investments: The Egyptian economy needs a renewed focus on local manufacturing as a core component of the economy, which is what the Ebda initiative is designed to achieve, Badra said. Ebda’s involvement in managing the Nile Fund for Industrial Development is hoped to encourage investors to ramp up their investments in local industry, which will eventually help cut down on our import bill and FX reliance for manufacturing, Badra explained.

Raw materials and production inputs are a key priority: Ensuring that raw materials and production inputs are readily available for local industry should be top of mind, particularly for industries related to renewable energy, including locally producing solar panels, as well as the iron and cable industries, which are mostly reliant on imports, Badra said. Improving the availability of production inputs for these sectors will go a long way towards weaning manufacturers off imports as the government hopes to encourage more exports.

REMEMBER- Egypt relies primarily on imports for mineral and chemical products, which together account for some 25% of our annual total imports. Manufacturers we previously spoke with agreed that local players’ ability to ramp up local production — and help cut down on our import bill — is largely dependent on the local availability of raw materials.

Could the government play a more active role in the initiative? Badra suggested bringing in the government as a partner in new projects financed by the Ebda initiative — if only with a partial share — in a way that would cut down on procedures and help speed up project implementation.

Your top industrial development stories for the week:

  • Engineering industries are eager to join government’s localization push: The Chamber of Engineering Industries plans to locally produce 140 products by the end of 2025, around 92% of the 152 engineering sector products that the government is targeting in its initiative to localize imported products. (Al Borsa)
  • Gov’t mulls performance-based export incentives to encourage localization: In a bid to double the local components in manufactured goods annually over the next four to five years, the government wants to roll out a system to give more export rebates to manufacturers who commit to the plan and reduce export support for those who don’t. (Al Borsa)
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