Good morning, friends. We have a packed issue for you this morning. And continuing with a months-long pattern, there’s plenty of good news here at home — and some insanity on the global scene.

Heavy industry in Egypt may have just gotten a break, we exclusively report: The Madbouly government appears to won Egyptian exporters a two-year exemption from the European Union’s new carbon tax, which went into effect on 1 January. If it comes through, that’s good news for manufacturers and will give officials here a window in which to enact an Egyptian version of the EU tax.

It’s rare that we cheer a new tax, but this one makes sense — any tax paid here into our coffers would, under EU rules, just about automatically offset the tax prescribed by Brussels’ carbon border adjustment mechanism.

Two other EnterpriseAM exclusives from the Dept. of Smart Policy: We have word this morning that the Ministry of Higher Education is re-opening the door to private investment in post-secondary education — and news that officials are scrapping a proposal to limit car part imports to only authorized dealers.

MEANWHILE- It’s just what the economy doctor ordered: Norway’s Scatec will build a new solar energy facility here — and key components for the attached battery energy storage system will be made here in Egypt by China’s Sungrow. The facility will the largest of its kind in Africa.

It’s exactly what we were promised on stage at our EnterpriseAM Climate Forum, which wrapped-up COP27 back in late 2022. There, our friend Amr Allam told us that the vision for Egypt’s big investment in green energy was to see us not just exporting (and using in Egypt) green fuel and green electrons — but making key components of the industry here at home as we build out infrastructure on a global scale.

And from the Dept. of Stupid Policy: US President Donald Trump’s war on the independence of the Federal Reserve just kicked into hyperdrive after prosecutors launched a criminal probe of Fed boss Jay Powell. Powell said the move is retaliation for his refusal to bow to Trump’s demand for lower interest rates.

^^ We have the full story on all of this and more for you, below.

Happening today

The House of Representatives will convene for its first session today, marking the beginning of its third legislative term, according to a statement. The 596-member chamber — now at full capacity following the appointment of 28 members by President Abdel Fattah El Sisi — will begin the term by electing a House speaker and two deputy speakers.

What to watch for: Now that the new House is ready for business, President Abdel Fattah El Sisi will appoint a prime minister and have them form a new cabinet.

What we’re watching for: Regardless of whether Prime Minister Moustafa Madbouly continues in office, we’re hoping for policy continuity in key business-relevant portfolios including investment and foreign trade as well as finance and international cooperation, petroleum, and tourism.

WEATHER- Better keep an umbrella on hand, seeing as there’s a chance of light rain in Cairo this evening. Apart from rainfall, the capital is looking at a high of 19°C and a low of 11°C today, according to our favorite weather app.

Watch this space

ENERGY— We’re paying less for our LNG shipments this year: The Mabdouly government renewed contracts with Shell and TotalEnergies to import 60 LNG cargoes this year, a senior government official tells EnterpriseAM. This time around, each cargo will set us back USD 40-45 mn, around USD 5 mn below the price paid last year thanks to a dip in global prices and ample supply. Deliveries are expected to start early February.

More gas in the pipeline: The Egyptian General Petroleum Corporation plans to launch a spot-market tender by March for 125 additional LNG cargoes, the source said. Supplier interest in Egypt is rising after officials stepped up their effort to pay arrears owed to energy companies and prices are c. USD 2 lower per mn British thermal units compared to last year, we were previously told.

In context: The news comes as an Israeli delegation is reportedly in town to try to work out the kinks in a USD 35 bn agreement to sell us gas. Israel threw a spanner in the woks by sliding inclauses that would allow it to unilaterally cut exports if officials there thought they needed more gas at home.

POLICY— The government now wants to see the private sector account for 72% of total investment by 2030, up from a previous target of 66%. That’s the highlight of the Planning Ministry’s second edition of its National Narrative for Development, which lays out goals from here through 2030 and a roadmap to reach them. It builds on the first edition, which we’ve been tracking since September.

Inflation watch

Annual core inflation — which excludes volatile items like food and fuel — fell to 11.8% y-o-y in December from 12.5% the month before, according to data from the Central Bank of Egypt. On a monthly basis, core inflation came in at 0.2%, compared to the 0.8% recorded in November.

What about annual urban inflation? We dove into December’s annual urban inflation reading and what it could mean for rates in yesterday’s edition of EnterpriseAM Egypt — check out the story here.

The road to becoming an AI hub

The Madbouly government is more prepared than ever before to ride the AI wave, having ranked first in Africa and third in MENA in Oxford Insights’ 2025 Government AI Readiness Index (pdf). Globally, Egypt climbed 14 spots y-o-y to rank 51st. The Madbouly government scored a perfect 100 in the policy capacity pillar, which measures its extent to “design and implement effective AI policies.”

Egypt is in a tight competition to become the premier AI hub for the Middle East and Africa at the same time as the UAE and Saudi commit USD bns to compute. The government’s National Artificial Intelligence Strategy, the second edition of which launched last year, outlines how the state aims to develop the AI sector between 2025 and 2030.

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The big story abroad

Keep a close eye on how markets open this morning: US Federal Reserve Chair Jerome Powell is facing a criminal probe over the renovation of the Fed’s headquarters in Washington, DC, the New York Times reports in an exclusive, citing people it says were briefed on the matter. Investigators are looking into whether he lied about the scope of the renovation, the cost of which hit USD 2.5 bn this year, up from an initial estimate of USD 1.9 bn.

US President Donald Trump has long attacked Powell and pushed him to drive interest rates lower and has frequently complained about the renovations, including in a famous video (watch, runtime: 3:17) last year during his tour of the HQ.

Powell, in a video statement (watch, runtime: 2:55), said the renovation was a “pretext” and that the threat of criminal charges is a “consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” explaining that they should be seen in the wider context of ongoing threats and pressure from Trump against the Fed over the past months.

IN CONTEXT- This is the sharpest attack on the Fed’s independence in generations. Powell is leaving his post in May, and Trump has said he’s already chosen — but has not announced — the successor, widely expected to be Kevin Hassett, the director of the National Economic Council.

MEANWHILE- Protests in Iran have intensified despite an ongoing crackdown by the police, leading to an estimated 500 deaths, according to a number of estimates. Trump has several times said he was ready to come to the “rescue” of Iranians, prompting Iran’s speaker of parliament, Mohammad Baqer Ghalibaf, to warn the US against any interference, saying: “Let us be clear: in the case of an attack on Iran, the occupied territories [Israel] as well as all US bases and ships will be our legitimate target,” he told parliament.

^^The must-read on the topic: Iranians defy intensifying crackdown as Trump weighs options.

Flights between Iran and the UAE, as well as Iran and Qatar, faced disruptions over the weekend, with around 20 flights between Iran and Dubai facing cancellation, though Emirates and flydubai’s flights seem to have departed on schedule yesterday, the National reports.

PLUS- The US could start easing sanctions on Venezuela as soon as next week as the US looks to begin receiving oil from the country, while India is once again getting into tech firm’s crosshairs due to its proposal to make smartphone makers share their phones’ source code with the government for security testing.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: We look at how the higher education landscape could change now that the Higher Education Ministry reopened the door to private investment in the sector.