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Tuesday, 29 Aug 2023

What We're Tracking Today
Ipo
Debt Watch
Debt Watch
Real Estate
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Diplomacy
Around The World
Going Green
Calendar

ADES International to IPO in Riyadh in September

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Today at a glance

1

IPO

ADES International to IPO in Riyadh in September.
2

DEBT WATCH

GlobalCorp closes EGP 2.54 bn securitized bond issuance.
3

DEBT WATCH

Pickalbatros, Beltone sign EGP 750 mn sale-leaseback agreement.
4

Also on our Radar

BP to invest USD 3.5 bn in Egypt in 3 years.
5

Real estate

State insurance fund wants to buy Heliopolis Housing’s Heliopark.
6

What We're Tracking Today

Beltone denies plans to acquire Cashcall.
7

Diplomacy

GERD talks end with no breakthrough.
8

PLANET FINANCE

A subsidiary of International Holding Co. just bought the UK’s largest private healthcare group.
9

Going Green

The Egyptian businesses recycling used cooking oil.

Tuesday, 29 Aug 2023

What We're Tracking Today
Ipo
Debt Watch
Debt Watch
Real Estate
Last Night’s Talk Shows
Egypt In The News
Also On Our Radar
Planet Finance
Diplomacy
Around The World
Going Green
Calendar
1

What We're Tracking Today

FRA releases carbon credit verification and certification standards

A very happy hump day, dear readers. Driving the news agenda at home this morning: Plenty of debt news, the outcome (or lack thereof) from this week’s GERD talks, and one of our own is going public in Riyadh next month. All that and more below.

WATCH THIS SPACE-

Another step towards a local carbon credit market: The Financial Regulatory Authority (FRA) yesterday released its carbon credit verification and certification standards, a fundamental part of the regulatory framework for the anticipated voluntary carbon market. The regulator is drawing up a list of local and foreign organizations capable of verifying and approving carbon credits. You can read the standards for local and foreign bodies here.

Remember: The EGX last year announced it would set up Africa’s first voluntary carbon market. The market will allow companies in Egypt and Africa working on emissions-reducing projects to sell certified carbon credits, which can then be bought by other companies wanting to offset their emissions. The bourse is partnering with the Agricultural Bank of Egypt and Enara Group’s Libra Capital to establish Libra Carbon, an Egyptian company that will develop, manage, and issue carbon certificates.

FROM THE RUMOR MILL-

Beltone denies plans to acquire Cashcall: Beltone Financial has not entered into any form of agreement to acquire fintech platform Cashcall, the company said in an EGX disclosure (pdf) yesterday. The filing came in response to a report from A sharq Busines s that claimed Beltone is looking to acquire a 60% stake in the company for around EGP 500 mn. “There are no contracts, understandings, or written or unwritten agreements . . . to acquire any stakes,” Beltone said.

REMEMBER- The financial services provider earlier this month received the greenlight from the Financial Regulatory Authority (FRA) to acquire Minya-based microfinance provider Cash.

HAPPENING THIS WEEK-

Deadline day for the Smart Green Projects initiative: Submissions for the second phase of the Smart Green Projects initiative will be due on Friday, 1 September. The second iteration of the government-led initiative is accepting applications for projects working on addressing issues like energy, emissions reduction, sustainable agriculture and green buildings. Shortlisted projects will get the chance to present their vision during COP28. The top three contenders in six categories are also awarded prizes between EGP 250k and EGP 750k.

THE BIG STORY ABROAD-

The Trump circus continues in the US media this morning after a district judge yesterday announced that the former president’s federal trial for allegedly trying to overturn the results of the 2020 election will begin on 4 March 2024. Trump’s lawyers had been pushing to delay the trial date until after the presidential election, set for November next year. (Associated Press | Reuters | Financial Times | Washington Post | Wall Street Journal)

Erdogan to discuss grain pact with Putin next week: Turkish president Recep Tayyip Erdogan will attempt to persuade Russian leader Vladimir Putin to re-enter the Black Sea grain pact with Ukraine during talks in Russia next week, according to Bloomberg. Moscow pulled out of the agreement last month and reimposed a partial blockade on Ukraine’s ports, threatening to provoke a fresh crisis in the global food market.

Russia denies claims it destroyed grain headed our way: Claims by Ukraine and the US that Moscow last week destroyed some 13k tons of grain that had been headed to Egypt and Romania were dismissed as “American propaganda” by the Russian Embassy in Cairo in a statement on Sunday. The embassy reiterated its commitment to aiding Egyptian food security, noting that Russia provided some 8.1 mn tons over the past year.

CHECK OUT OUR AGENDA-

The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

This is our first two-day event,which should give us plenty of time to dive into the nitty gritty of this industry we love. Our panels will see CEOs, bankers, investors and founders gather to discuss the future and trends shaping banking, finance, fintech and NBFS.

Our full agenda will be out at month’s end. Among the topics we’ll be discussing:

  • Looking into the crystal ball: Top industry CEOs will join us on stage to answer tough questions on where we are as an industry, the forces that will shape all of our businesses going forward, and their views on dealflow in the year ahead.
  • Surviving nuclear winter: We discuss how private equity and venture capital players are tackling challenges including fundraising and deployment in an environment in which it’s awfully difficult to price your local asset in USD terms.
  • The robots are coming: We explore what the coming AI and big data means for the industry in our part of the world and what can bankers, NBFI, and fintech players do to capitalize on them.
  • What do you do when nobody wants to be a banker — and when those who are already (investment or commercial) bankers are either (a) dreaming of doing their own startup or (b) moving to Dubai (or, increasingly, Riyadh)? We go deep into the weeds with industry leaders on how they’re building talent for tomorrow.
  • NBFIs are a bubble. Prove me wrong: We chart the explosive rise of NBFIs and ask whether the industry is ready for a wave of consolidation. We’ll dive into whether consumer finance is starting to mature as a segment — and ask which sector is next.
  • What does 2024 hold in store for fintech: We dive deep into which categories are getting traction, which segments will account for the lion’s share of future growth, what business they would start today if they could, and what we can expect of the sector in the year ahead.
  • What’s a bank, anyway? Wherein we talk challenger and neobanks with the players looking to shake up the brick-and-mortar industry.

** NEW: MORE NETWORKING TIME- Our agenda includes expanded networking time, including an expanded coffee break and a post-event networking room for you to interact with your peers and speak one-on-one with the team at Enterprise.

STAY TUNED for more detail about our exciting agenda in the weeks to come.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: We take a look at the Egyptian businesses recycling used cooking oil.

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Don't miss your chance to take #ThreeDaysOff and flow with us at Solasi at Somabay. Head to solasifestival.com to find out more and book your pass today.

2

IPO

Egypt-born ADES International to IPO in Riyadh in September

ADES pulls the trigger on its IPO: Cairo-born regional oil and gas services company ADES International has announced its intention to float (pdf) on the Saudi Tadawul. The company is planning to offer a 30% stake (338.7 mn shares), which could raise more than USD 1 bn, Bloomberg previously reported.

Existing shareholders are selling part of their stakes: Almost a third (101 mn) of the shares offered will come from existing shareholders — Intro Group subsidiary ADES Investments Holding, Saudi Arabia’s Public Investment Fund (PIF), and Zamil Investment. The remaining 237 mn will be newly-issued shares via capital increase. The company didn’t disclose how many shares the individual shareholders will sell.

The current breakdown: Intro Group’s ADES Investments Holding owns the majority 54.5% stake, the PIF owns 35.5%, and Zamil Investment owns 10.0%.

ESOP: The company will also issue up to 33.9 mn new shares — or 10% of the total offered shares — to company employees.

The company will hold a five-day book building process from 10-14 September, after which it will announce the final share price on 18 September. ADES will open the door for retail investors to subscribe on 20-21 September. Trading on the shares is set to commence “after all relevant regulatory requirements are satisfied.”

It’s been a long time coming: ADES has been mulling a Riyadh listing since at least last year but the process has reportedly stalled due to unfavorable market conditions. The Saudi Capital Market Authority in June approved ADES’ application to offer the shares on the Saudi exchange, giving it a six-month window in which to go public.

Where is the money going? The IPO proceeds that don’t go to the selling shareholders will go towards reducing the company’s outstanding debt and financing its growth plans.

Advisors : The company has tapped our friends at EFG Hermes, Goldman Sachs, JPMorgan, and SNB Capital to act as financial advisors, global coordinators, bookrunners, and underwriters on the transaction. SNB Capital has also been appointed lead manager. Our friends at HSBC, GIB Capital, Al Rajhi Capital, and Saudi Fransi Capital will also act as bookrunners and underwriters to the offering. Lazard Financial Advisory is ADES’s independent financial advisor.

From public to private and back again: The company was trading on the London Stock Exchange until 2021 when it was delisted following a takeover backed by the PIF.

Why do we care? The company started life here in Egypt, where it maintains a significant presence. It derived 18% of its revenue locally in 2019 (ahead of a sustained push to expand its regional operations), according to a 2020 investor presentation (pdf). It is currently the country’s largest offshore driller. The company has also been reported as saying it could look into a dual listing on the Egyptian Exchange after its Saudi debut.

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3

DEBT WATCH

GlobalCorp closes EGP 2.54 bn securitized bond issuance

Non-banking financial services firm GlobalCorp has closed a EGP 2.54 bn issuance of securitized bonds, it said in a statement (pdf) yesterday. The bonds were divided into three tranches rated AA+, AA, A by Middle East Rating & Investors Service (MERIS).

This is part of a wider program: GlobalCorp has so far securitized more than EGP 5.9 bn of its portfolio over the past two years. The company plans to eventually sell EGP 10 bn worth of securitized bonds in the ongoing program. This is the company’s first sale since December when it closed a EGP 1.1 bn issuance.

Where the money’s going: The proceeds will be used to finance GlobalCorp’s local expansion plans, said the group’s CEO and MD, Hatem Samir. The group is looking at opening a new office in the Gulf region, he said, without providing further details.

Advisors: Al Ahly Pharos, CIB, CI Capital and Arab African International Bank (AAIB), acted as joint financial advisors, while Al Ahly Pharos and CIB also acted as joint lead arrangers, transaction managers, book runners, and underwriters of the issuance. Dreny and Partners acted as legal advisor, while KPMG acted as an auditor.

There was strong demand from local and international banks: AAIB, the National Bank of Egypt, CIB, Attijariwafa, Bank ABC, SAIB, Al Baraka Bank and EBank all subscribed to the issuance.

DATA POINT- Companies have now issued EGP 48.6 bn of securitized bonds so far this year, according to data tracked by Enterprise. This is more than total volumes across the whole of 2022.

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4

DEBT WATCH

Pickalbatros, Beltone sign EGP 750 mn sale-leaseback agreement

Pickalbatros sells + leases back Sharm hotel: Pickalbatros Hotels & Resorts Group has signed an agreement with Beltone Financial’s leasing subsidiary to sell and lease back one of its hotels, according to a joint press release (pdf) out yesterday. The EGP 750 mn agreement will see Beltone Leasing acquire the Laguna Vista Beach Resort in Sharm El Sheikh and lease it back to the company.

The rationale: Pickalbatros will use the proceeds to finance its working capital and expand its hotel portfolio, Chairman Kamel Abou Ali said. The company is planning to open a new 200-key hotel in Sharm before the end of the year.

What we don’t know: Information about the lease period and rental payments wasn’t made public.

EXPLAINER- The sale-leaseback agreement: It’s a transaction in which a company sells an asset, such as real estate, to a buyer (often a financial institution or a leasing company), and then immediately leases it back from the buyer. This allows the company to free up capital tied to the asset while still retaining use and operational control over it. This type of financial arrangement is often used by businesses to generate cash flow, reduce debt, or finance other business activities while maintaining the use of essential assets.

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5

Real estate

Egyptian state insurance fund submits offer to buy 100% of Heliopark real estate project

NOSI wants Heliopark: The state-owned National Organization for Social Ins. (NOSI) has submitted an offer to buy 100% of the land allocated to the Heliopark project from Heliopolis Housing and Development (HHD), a government source told Enterprise yesterday on condition of anonymity. The state-owned real estate developer yesterday confirmed in a bourse filing (pdf) that it is in talks with the fund regarding the sale of the project.

Refresher: HHD last month said that its board agreed to study an offer submitted for the Heliopark project, without naming the party behind the offer or providing further details. The state-owned company put the New Cairo project back out to tender after scrapping a partnership agreement with Mountain View earlier this year, citing the current economic conditions and rising land valuations.

What we don’t know:

#1- Details of a potential agreement remain sketchy: The source declined to answer questions about the terms of the offer, saying only that a final agreement would be reached in 4Q 2023.

#2- What happened to that Gulf investor? According to our understanding, HHD was in talkswith an undisclosed Gulf investor about partnering on Heliopark. It is unclear what a sale to NOSI would mean for Gulf involvement in the project or whether talks are still ongoing. Rumors in the local press earlier this year suggested that Emirati real estate giant Aldar Properties was interested in partnering with HHD on the project.

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6

LAST NIGHT’S TALK SHOWS

Rice-less ration cards + the latest on GERD talks

On the airwaves last night: The controversial removal of rice from ration cards, tougher fines on trains, and yesterday’s three-way GERD negotiations all received attention from the nation’s talking heads last night.

No breakthrough in GERD talks: Irrigation Ministry Spokesperson Mohamed Ghanem appeared on Ala Mas’ouleety last night (watch, runtime: 9:36) to discuss the previous two days of negotiations between Egyptian, Ethiopian and Sudanese officials over the Grand Ethiopian Renaissance Dam (GERD). Ghanem pretty much repeated yesterday’s statement from the ministry, which attributed the lack of progress in the talks to Ethiopia not compromising on its position. We have more in this morning’s Diplomacy section, below.

Rice removed from ration cards: Ala Mas’ouleety’s Ahmed Moussa dedicated airtime to discussing Supply Minister Ali El Moshelhy’s announcement on Sunday (watch, runtime: 2:50) that people would no longer be able to purchase rice using ration cards with ministry official Sayed Dayra (watch, runtime: 10:28). Dayra said that the decision was made because there’s no place for rice on the EGP 50 ration card anymore considering that oil eats up EGP 30 from the ration card credit and sugar eats up EGP 12.5, not leaving enough credit for the EGP 12 rice bag. Moussa urged the ministry to scrap the decision, saying that “it should be left to the citizen to choose which commodity they want to buy on the ration card and not force the oil and sugar while excluding the rice.”

Also getting attention on the airwaves:

  • Election 2024: More parties endorsed Sisi in the upcoming presidential election. Ala Mas’ouleety (watch, runtime: 5:24), Masaa DMC (watch, runtime: 5:20), and Al Hayah Al Youm (watch, runtime: 10:23) had coverage.
  • Tougher train fines: The Transport Ministry has introduced tougher fines for passengers caught smoking in trains (EGP 100, up from EGP 70) and on the metro (EGP 250, up from EGP 200) and evading fares (up to EGP 70 in trains and EGP 100 in the metro). Masaa DMC (watch, runtime: 1:50) had the story.
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7

EGYPT IN THE NEWS

Elections, “mystery plane” get international attention

A group of opposition political parties have floated the prospect of running a candidate in the upcoming presidential election. The Free Current Movement called for broad change at a press conference yesterday. The story is getting prominent play from Reuters and the Associated Press.

Also in the headlines: The “ mystery plan” in Zambia, where five of the six Egyptians detained by Zambian authorities earlier this month yesterday appeared in court. AFP and the BBC have the news.

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8

Also on our Radar

BP to invest USD 3.5 bn in Egypt in 3 years. PLUS: latest on Middle East Glass, Cairo-Tokyo flights + new education visas

ENERGY-

BP plans fresh investment: BP will invest USD 3.5 bn on exploration and production operations in Egypt over the next three years, Ittihadiya said yesterday. This came during a meeting between BP CEO Bernard Looney and President Abdel Fattah El Sisi yesterday.

BP is a key player in Egypt’s gas industry: BP with its partners currently produces around 60% of the country’s gas. The company was awarded two exploration blocks — Northwest Abu Qir and Bellatrix-Seti East — in the Eastern Mediterranean last year.

M&A-

Middle East Glass greenlights due diligence for investors eyeing Gulf Capital’s stake: The board of EGX-listed bottle maker Middle East Glass (MEG) gave the greenlight to unnamed investors eyeing Gulf Capital’s 37% stake in the company to conduct due diligence, according to an EGX disclosure (pdf) yesterday. The board also appointed Bahaa-Eldin Law Office as its legal advisor on the transaction.

REMEMBER- Gulf Capital earlier this week requested that MEG allow the potential investors to commence the due diligence process ahead of a potential sale. Arqaam Capital is acting as the sell-side advisor.

Who owns what? Parent firm MENA Glass Holding holds 53% of MEG, while Gulf Capital’s 37% stake (owned through special purpose vehicle MTM Packaging 2) makes it the second-largest shareholder. ICG Holdings owns 6%.

TRANSPORT-

Cairo-Tokyo direct flights are returning: EgyptAir will resume direct flights between Cairo and Tokyo in September, theCivil Aviation Ministry said yesterday. The flag carrier will run one flight a week to the Japanese capital.

EDUCATION-

New visas + financial incentives for international students: The Higher Education Ministry yesterday announced a new scholarship program and visas for international students. Under the EGYAID initiative, foreign students will receive discounts on air fares with EgyptAir and cheaper tickets to cultural events and touristic sites. Foreigners will also now be able to apply for student visas, granting them residence in Egypt for the duration of their courses. The deadline for applications for EGYAID is 15 September.

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9

PLANET FINANCE

A subsidiary of International Holding Co. just bought the UK’s largest private healthcare group

Two Gulf sovereign wealth funds. Two acquisitions. Abu Dhabi-based International Holding Co’s (IHC) subsidiary Pure Health has fully acquired the UK’s largest private healthcare provider Circle Health Group for AED 4.4 bn, while the Public Investment Fund will acquire Standard Chartered’s aviation finance arm for USD 3.6 bn. (Abu Dhabi Media Office | Bloomberg)

Also worth knowing this morning:

  • Evergrande shares crash after trading resumes: Chinese property developer Evergrande’s shares plunged 87% yesterday after trading resumed for the first time in almost 18 months, as the heavily indebted company delayed restructuring talks with creditors. (Financial Times)
  • Eurozone money supply decreased for the first time since 2010 in the 12 months to July, potentially warning of economic downturns to come. The drop was attributed mainly to a fall in the growth rate of lending to the private sector. (Financial Times)

EGX30

18,585

+0.4% (YTD: +27.3%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,464

-0.1% (YTD: +9.4%)

ADX

9,749

-0.2% (YTD: -4.5%)

DFM

4,100

0.0% (YTD: +22.9%)

S&P 500

4,433

+0.6% (YTD: +15.5%)

FTSE 100

7,339

+0.1% (YTD: -1.5%)

Euro Stoxx 50

4,294

+1.4% (YTD: +13.2%)

Brent crude

USD 84.39

-0.1%

Natural gas (Nymex)

USD 2.58

+1.4%

Gold

USD 1,947.80

+0.4%

BTC

USD 25,983

-0.4% (YTD: +57.2%)

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 2.6 bn (26.6% above the 90-day average). Foreign investors were net buyers. The index is up 27.3% YTD.

In the green: Palm Hills Development (+4.30%), Beltone Financial Holding (+3.7%), and ADIB (+2.1%).

In the red: GB Corp (-2.8%), Heliopolis Housing (-2.1%), and Cira Education (-1.9%).

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10

Diplomacy

GERD talks end with no breakthrough

The first round of GERD talks between Egypt, Ethiopia and Sudan in two years have ended without a breakthrough, the Egyptian Irrigation Ministry said in a statement yesterday. The discussions “did not witness any tangible change in the Ethiopian position,” a ministry spokesperson said. In a shorter statement, the Ethiopian foreign ministry said only that the “parties exchanged views to reach a win-win situation.”

Remember: The leaders of Egypt and Ethiopia pledged in July to finalize an agreement within four months on the filling and operation of the USD 4.6 bn hydroelectric dam. Ethiopia has been unilaterally filling the dam’s reservoir for the past three years without an agreement, inflaming tensions between the two countries.

Both sides vowed to reach an agreement but the song remains the same:

  • Egypt said it was exerting efforts to reach an agreement “as soon as possible,” and called on Addis Ababa to recognize its concerns about the dam’s impact on its water security.
  • “ Ethiopia will endeavor to conclude the trilateral negotiation based on the principle of equitable and reasonable utilization while ensuring its rightful share of the Nile waters,” said the country’s foreign ministry.

What’s next: Officials from the three countries will gather in the Ethiopian capital for a new round of talks in September, the Ethiopian foreign ministry said.

The news got attention internationally: Bloomberg | The National.

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11

AROUND THE WORLD

Sudan army chief vows to to defeat RSF

The Sudanese army isn’t ready to talk: General Abdel Fattah Al Burhan, head of the Sudanese army and the country’s de facto leader, has vowed to defeat the Rapid Support Forces, a day after the head of the paramilitary group voiced support for renewed ceasefire talks. “We do not make deals with traitors, we do not make deals with anyone who has betrayed the Sudanese people,” Al Burhan said in a speech to soldiers at Port Sudan yesterday (watch, runtime: 7:09).

RSF leader wants new truce talks: In a statement Sunday, RSF leader General Mohamed Hamdan “Hemedti” Dagalo indicated willingness to negotiate a long-term ceasefire and agree “comprehensive political solutions” to bring the five-month conflict to an end.

ALSO- Talk of Israel-Libya rapprochement proves contentious: Libyan Foreign Minister Najla Mangoush has reportedly been forced to flee to Turkey, after a meeting with her Israeli counterpart Eli Cohen in Rome last week sparked a backlash and protests in western Libya. The country’s prime minister has suspended Mangoush and opened an investigation after Cohen revealed that the two had met. The two countries have no formal relations. (Reuters | New York Times)

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Our weekly deep dive into the green economy and ESG issue in Egypt.

Published every Tuesday in EnterpriseAM.

Read going Green
12

Going Green

The Egyptian businesses recycling used cooking oil

What’s cooking? Over the last two decades, a number of local startups have sprung up that collect used cooking oil (UCO) to turn it into UCO-derived biodiesel. These companies have to navigate the logistical nightmare of making small collections from thousands of household kitchens and restaurants across the country. Then, they need to decide whether to seek offtakers for the product in export markets or domestically manufacture biodiesel themselves. It’s a crowded market with tight margins — so are UCO recyclers on to something or is the industry just a flash in the pan?

Oil (and money) down the drain: According to estimates from a 2020 paper by the National Research Center, Egyptians get through 2.5 mn tons of edible vegetable oils a year, which equates to an incredibly calorific 25 liters per person annually. It also estimated that 90% of the country’s UCO is thrown down the drain. This could cause serious sewer blockages, spiraling maintenance bills for the government, and even social discontent, according to some.

One person’s trash is another’s treasure: This once worthless waste product is now expected to be a USD 11 bn global market by 2028, according to Fortune Business Intelligence. On the local level, our UCO market stood at USD 14 mn in 2021, Nour El Assal, co-founder of local UCO startup Tagaddod, previously told Enterprise. He added that the Egyptian market’s total local potential stood at some USD 352 mn, making it 96% untapped. Some 200k tons of UCO a year are currently collected by “26 companies working in the field of UCO, either collecting for exporting, collecting for producing biodiesel, or even collecting for making soap,” local biofuel consultancy Bio Rotterdam for Energy Consultancy Executive Manager Ibrahim Farouk told Enterprise.

Biodiesel 101? Biodiesel is a type of biofuel that is made from either purpose-grown or waste vegetable oils and animal fats. It can be used in cars, planes, and pretty much anything with an engine. The basic idea behind biodiesel is that the carbon released by biofuel is only that which has already been sequestered during the growth of the biomass, presenting a supposedly closed system with no net increase in atmospheric carbon (although doubts have been raised). While biodiesel can be used straight, it’s almost always blended with petrodiesel at a rate of 2%-20%.

It’s a mostly export-orientated business: Two industry insiders told us that no less than 70% or 85% of UCO collected in Egypt is exported abroad. The remainder goes to the few local biodiesel refineries or to make soap and other oil-based products.

There’s demand in Europe: Delta Oil for Oil Recycling is among the majority of local UCO recyclers who focus purely on the collection and export of UCO. Company CEO Serag Moussa told us their market research made clear that Europe doesn’t lack for biodiesel manufacturing plants — but does suffer from a shortage of UCO to supply them as a feedstock.

Who’s buying? While some of the foreign offloaders of Egyptian UCO are specialized biofuel companies, the market is increasingly dominated by the oil and gas giants. Finnish fossil fuel goliath Neste’s facility in Rotterdam has an annual production capacity of 1.4 mn tons — set to increase to 2.7 million tons in 2026 — and is joined by the likes of France’s Total and Italy’s Eni with massive facilities that far outstrip our local production capabilities.

Can the industry be fully localized? The question of whether to export UCO abroad or use it to supply domestic biodiesel plants was a point of contention for all the industry insiders that spoke to Enterprise. BioRotterdam’s Farouk says it's viable to make our own homegrown biofuels from both UCO and purpose-grown crops, adding that Egypt could act as a hub for biodiesel production in Africa or the MENA region. The returns that can be made on exporting biodiesel feedstock has discouraged investment into the more complicated and riskier proposal of domestic UCO processing, he said, insisting that local production is “not expensive, [rather] it’s an investment.”

Our current biodiesel production is tiny, but that may soon change: According to one industry expert who spoke to Enterprise, our entire annual biodiesel production stands at approximately 50k tons. We were told that this output is spread between six “operational” refineries and three that were described as “semi-operating.” For comparison, our annual biodiesel production is only 0.4% of what the EU produces and is less than what Germany produces every day. However, state and private institutions, both foreign and Egyptian, have announced large-scale biofuel projects in recent years, including a planned 600 mn biofuel production plant whose 350k annual output could increase Egyptian biodiesel production 7x.

UCO collection from Egyptian households is no easy task: “Households on average give away three liters per month and we have thousands of orders spread over different cities,” Delta Oil’s Moussa says. The company trains local partners in disadvantaged and mostly rural neighborhoods and offers them equipment to collect the UCO. The partners then sell the product to Delta Oil in bulk, Moussa told us.

Other companies have turned to tech to manage the logistics involved in such a scattered supply chain. Ten-year-old startup Tagaddod, for example, allows households to request collections through its Green Pan app to map more efficient, data-driven routes.

It’s a tight market: Many companies involved in UCO collection are increasingly like “animals in the wild that fight because they are drinking from the same pool,” BioRotterdam’s Farouk says. Pointing to what he believes is one of the biggest challenges facing the industry, Farouk called for regulation to push UCO collectors to search for untapped markets from which to collect UCO.

High prices, small margins: Biodiesel is 70% to 130% more expensive than diesel and petrol in Europe, our main export market. However, the high costs involved in the collection of UCO in addition to an expensive manufacturing process means that margins are much slimmer than for traditional fossil fuel production. The situation for Egyptian UCO startups has only gotten more difficult in 2023 with a glut of reportedly suspicious Chinese biofuels entering the European market. The influx of biofuels from China “created a huge scandal in the first quarter of this year and prices dropped more than 50%,” Delta Oil’s Moussa told Enterprise.

Your top green economy stories for the week:

  • More locally-manufactured EVs: India’s Hinduja Group is set to sign a final agreement with Egypt to support local EV manufacturing in the country by the end of 4Q 2023. (Enterprise Climate)
  • Petrojet tapped for New Valley’s solar plants: A consortium of Egypt’s Smart Engineering Solutions (SES) and German renewable energy firm Frenell has selected Cairo-based Petrojet to be the contractor for two concentrated solar power (CSP) plants in Egypt’s New Valley. (Enterprise Climate)
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CALENDAR

SEPTEMBER

September: Hassan Allam Utilities + Agility to open Yanmu East logistics park.

September: Sustainable Debt Coalition Initiative agreed at COP27 to launch.

September: IDH to open first branch in Saudi Arabia.

September: The Egypt-Germany trade and investment joint conference in Cairo.

September: JETRO’s second delegation arrives in Cairo.

1 September (Friday): Application deadline for the Smart Green Projects initiative.

3-5 September (Sunday-Tuesday): Pharmaconex, Egypt International Exhibition Centre, Cairo.

4-6 (Monday-Wednesday): Africa Climate Summit, Nairobi, Kenya.

7-8 (Thursday-Friday): Regional Forum for Sustainability & Development, Cairo.

9-10 September (Saturday-Sunday): G20 summit, New Delhi, India.

10-12 September (Sunday-Tuesday): The International Agricultural Exhibition for Africa and the Middle East, Sahara.

13-14 September (Wednesday-Thursday): Hydrogen Egypt Summit, Nile Ritz Carlton, Cairo.

13 September (Wednesday): Deadline for settling outstanding military service in FX.

15 September (Friday): IMF to review USD 3 bn program.

15 September (Friday): Deadline for applications to EGYAID scholarship program.

15 September (Friday): Deadline for FX bureaus to comply with new capital requirements.

17-18 September (Sunday-Monday): Arab Security Conference and Exhibition, Nile Ritz Carlton, Cairo.

17-19 September (Sunday-Tuesday): Sharm Rendezvous, Rixos Premium Seagate, Sharm ElSheikh.

18-19 September (Monday-Tuesday): Enterprise Finance Forum, St. Regis Hotel, Cairo.

19-20 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

20-23 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

21 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

25 September (Monday): Nasdaq deadline for Swvl Holdings Corp to increase its market value of publicly held shares to a minimum of USD 15 mn.

25-26 September (Monday-Tuesday): Egypt to host the Asian Infrastructure Investment Bank’s annual board meeting, Sharm El Sheikh.

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

27 September (Wednesday): Deadline for bidding in the fifth phase of the investment map offered by the Industrial Development Authority (IDA).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

28-29 September (Thursday-Friday): Medical Tourism Conference, Sharm ElSheikh.

30 September (Saturday): The start of the new academic year for Egyptian universities.

30 September (Saturday): The start of the new academic year for Egyptian schools.

OCTOBER

October: Deadline for ins. providers to link their databases with the FRA.

October: Egyptian-Jordanian Business Council, Amman, Jordan.

1-3 October (Sunday-Tuesday) International Expotec for water economics management, Egypt International Exhibition Center, Fifth Settlement, Cairo.

2-4 October (Monday-Wednesday): Sharm Rendezvous - Ins. Market, Rixos Premium Seagate, Sharm ElSheikh.

2-5 October (Monday-Thursday): ADIPEC 2023, Abu Dhabi National Exhibition Center.

6 October (Friday): Armed Forces Day.

9 October (Monday): The Narrative PR Summit, Somabay Red Sea.

9-11 October (Monday-Wednesday): Arabs Savings and Financial Literacy Conference, Four Seasons Hotel.

10-12 October ( Tuesday-Thursday) Ceramica Expo, Cairo International Convention Center.

13 October- 20 October (Friday-Friday): The sixth edition of El Gouna Film Festival (GFF).

Late October-14 November: 3Q2023 earnings season.

15-17 October (Sunday-Tuesday): Egypt Automotive Aftermarket Exhibition, Cairo International Convention Center.

26 October (Thursday): Daylight saving time ends.

29-31 October (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center.

29 October - 2 November (Sunday- Thursday): Cairo Water Week.

30-31 October (Monday-Tuesday): Intelligent Cities Exhibition and Conference, Dusit Thani LakeView, Cairo.

30-31 October (Monday-Tuesday): Global Business School Network (GBSN), American University of Cairo.

31 October - 1 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

NOVEMBER

2 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo.

14-15 November (Tuesday-Wednesday): Destination Africa, Royal Maxim Palace Kempinski Hotel.

15-24 November (Wednesday-Friday): Cairo International Film Festival, Cairo.

19-22 November (Sunday-Wednesday): Cairo ICT, Egypt International Exhibition Center.

23 November (Thursday): Worldview Education Fair, Cairo. (Register here)

30 November-12 December (Thursday-Tuesday): COP28, Dubai.

DECEMBER

10-11 December (Sunday-Monday): eGlobe Expo, St. Regis Almasa Hotel, Cairo.

12-13 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

12-14 December (Tuesday-Thursday): Food Africa Expo, Egypt International Exhibition Center.

21 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

Summer 2023: EGX to launch a shariah-compliant index.

1H 2023: GAFI roadshow set to launch to drum up foreign investment for golden licenses

1H 2023: Abu Dhabi Islamic Bank intends to launch a digital consumer finance company

2H 2023: Egyptian government expected to sign agreements with a consultant for the EuroAfrica electricity interconnector.

2H 2023: President Abdel Fattah El Sisi and Turkish President Recep Tayyip Erdogan expected to hold a summit.

3Q 2023: E-Finance to launch in Saudi Arabia.

4Q 2023: EGX to launch its new futures exchange.

End of 2023: A Developments’ first phase of the Lazoghly development completed.

2024: Standard Chartered Bank to open a branch in Egypt.

End of 2024: The launch of the high-speed train line linking Ain Sokhna with Al Alamein City.

November 2024: Egypt to host the 12th session of the World Urban Forum (WUF12).

2Q 2025: Safaga Terminal 2 to initiate operations.

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