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Wednesday, 24 May 2023

What We're Tracking Today
Development Finance
Legislation Watch
Investment Watch
Energy
Investment Watch
Earnings Watch
Moves
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Hardhat
Calendar

African Development Bank mobilizes USD 2.2 bn to bolster Egypt’s water security

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Today at a glance

1

Development finance

 African Development Bank mobilizes USD 2.2 bn to bolster Egypt’s water security.
2

LEGISLATION WATCH

 Officials call for legislative overhaul to boost industrial production.
3

Investment Watch

 Egypt-Oman fund to go live in 4Q 2023.
4

Energy

 Energy China to ink framework agreement for green hydrogen plant by July.
5

Investment Watch

 Egypt named among top emerging markets for foreign investment.
6

What We're Tracking Today

 Egypt has options to solve the FX-devaluation conundrum.
7

EARNINGS WATCH

 Madinet Masr profits more than double in 1Q 2023.
8

HARDHAT

 A look at the government’s spending plans for the Hayah Karima initiative in FY 2023-24.

Wednesday, 24 May 2023

What We're Tracking Today
Development Finance
Legislation Watch
Investment Watch
Energy
Investment Watch
Earnings Watch
Moves
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Hardhat
Calendar
1

What We're Tracking Today

Egypt has options to solve the FX-devaluation conundrum

Good morning, folks: We have a fairly brisk issue for you this morning as we race towards the end of another week.

HAPPENING TODAY-

It’s day three of the AfDB annual meetings: The African Development Bank (AfDB) annualmeetings in Sharm El Sheikh continue today. We have more on yesterday’s events in this morning’s news well, below. The meetings run through to Friday.

The Suez Canal Economic Zone continues its roadshow in China and Hong Kong:A delegation led by CEO Walid Gamal El Din has been meeting with business leaders and investors in the country since Monday, and yesterday announced that Energy China would sign a framework agreement for a proposed green hydrogen plant in the coming two months. More on this below.

EFG Hermes sans Hermes? EFG Hermes Holding will hold an AGM today where shareholders will vote on several proposals, including changing the company’s name and increasing its capital. If approved, the bank will change its name from EFG Hermes Holding to EFG Holding, and raise its issued and paid-in capital by 25% to EGP 7.3 bn.

Avior — HC Egypt Conference: HC Brokerage and Avior Capital Markets’ virtual conference continues today. The four-day event brings representatives from 29 EGX-listed companies together with financial institutions from the US, Canada, Europe, South Africa, the UAE, and Egypt to discuss investment opportunities.

Lawmakers to discuss tougher penalties for harassment: A House joint committee featuring the Legislative Committee and Human Rights Office will discuss draft amendments to the penal code that would introduce harsher penalties for harassment and assault, especially in the workplace and public transportation, Youm7reports. The cabinet approved the amendments earlier this month.

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

Solving the investment / devaluation conundrum: Egypt is facing an economic catch-22, where foreign investors wait for the EGP to weaken further before biting on the state’s asset sale program, but policymakers want to secure foreign investment before any further currency depreciation. There could be ways around it, though, according to Monica Malik, chief economist at Abu Dhabi Commercial Bank, who tells Bloomberg that the state should still be able to achieve some asset sales without first having to embark on a further devaluation.

#1- Negotiating exchange rates on a case-by-case basis: The government could negotiate with Gulf investors to sell its locally-priced assets at different foreign-exchange rates, avoiding the need to float the currency before it has received vital FX inflows, she says. The caveat: “Wider investment would still need a further devaluation in the EGP.”

#2- Making them an offer they can’t refuse: It could also ease up on the valuations, effectively providing compensation to investors ahead of a devaluation, she says.

Remember: The government is aiming to raise USD 2 bn by privatizing state-owned assets by the end of June. This would give it more room to meet the conditions of the IMF review — partly by transitioning to a fully-flexible exchange rate — and unlock the second tranche of its USD 3 bn loan. The government kicked off the privatization process with the sale of a 9.5% stake in Telecom Egypt earlier this month, though with only 9% of the shares bought by foreigners the sale did little to bring in FX.

THE BIG STORIES ABROAD-

The US debt ceiling drama continues to drive the news agenda in the Western press this morning after a fresh round of talks between Democratic and Republican lawmakers ended with little progress made. Making things harder were a group of House Republicans who called into question the 1 June deadline, which is when the Treasury Department says the country could default on its debt if no agreement is reached. (Reuters | Bloomberg | Financial Times| New York Times | Wall Street Journal | CNBC)

Markets are starting to get unnerved: The continued impasse is finally starting to unnerve the markets, with US equities and short-term bonds falling yesterday. Bloomberg and the Financial Times have more.

The sell-off is continuing this morning in Asia, where equity markets across most of the region are in the red. European markets are expected to follow them later this morning while US equity futures are currently trading higher.

The truce in Sudan is (sort of) holding: A “relative calm” has fallen over the Sudanese capital over the past 24 hours, with only sporadic airstrikes and artillery fire being reported since the Saudi- and US-mediated ceasefire came into effect last night, according to Reuters. The two sides agreed during talks in Jeddah last week to begin observing a week-long truce to allow in humanitarian aid from Monday night. Preparations for sending aid into the country have now begun, Riyadh and Washington said in a joint statement yesterday.

If the truce doesn’t hold? The US could place sanctions on the Sudanese army and the RSF if they fail to see out the seven-day ceasefire, U.S. Secretary of State Antony Blinken said yesterday.

Microsoft Windows is going full-AI: Microsoft has begun releasing a suite of AI upgrades to its Windows 11 operating system and Bing search engine as the company continues in its bid to become the market leader in AI-led computing. Speaking on the opening day of the company’s developer conference yesterday, CEO Satya Nadella said its ChatGPT generative AI model will now pull in search results from Bing for paid customers, and from June the company will start integrating its AI-driven Co-Pilot software (watch, runtime: 9:10) into Windows 11 and Microsoft 365. Read up on everything here.

CORRECTION- In an article published in yesterday’s EnterpriseAM, we incorrectly wrote that the Egyptian American Enterprise Fund invested EGP 3 mn in Dawi Clinics in 2018, rather than USD 3 mn. The story has since been amended on our website.

COME WORK FOR OUR ADVISORY ARM-Enterprise Advisory (formerly known as Inktank Communications) is looking for smart, talented people to help us tell the stories of exciting companies. Enterprise Advisory is the region’s leading investor relations advisory company and works on investor and strategic communications issues that take you deep inside the c-suite. Our clients are in Egypt, Saudi Arabia, the UAE and beyond. Egyptian and foreign nationals alike are welcome to apply.

We’re running a four-month training program for fresh grads and career switchers and will hire every successful grad of the program.

Apply directly to jobs@enterprisemea.com and mention “advisory development program” in your subject line.

FACT CHECK- National Automotive Company (NATCO) subsidiaries Star National Automotive and Alexandria National Automotive denied knowledge of plans to distribute new models of Mercedes-Benz EVs in Egypt, the company told Enterprise yesterday. We picked up the news earlier this week from Al Borsa, which reported statements made by CEO Yasser Saleh during an interview.

*** 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 take a look at the government’s spending plans for the Hayah Karima (Decent Life) initiative for the coming fiscal year.

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The TriFactory's Somabay Endurance Festival returns for the fifth time from 25-27 May,bringing together Egypt's multi-sport community for an amazing weekend filled with swimming, cycling, and running throughout the beautiful scenery of Somabay. Select from six different races, Sign up now, and get ready to Experience Endurance.

2

Development finance

AfDB mobilizes USD 2.2 bn to bolster Egypt’s water security

The AfDB has raised more finance than expected for water projects in Egypt: The African Development Bank (AfDB) has mobilized USD 2.2 bn to improve Egypt’s water security under the government’s Nexus for Water, Food and Energy (NWFE) program, up from the initially targeted USD 1.4 bn, the bank’s president Akinwumi Adesina said yesterday. The money will “support desalination and water treatment plants for agriculture,” he said, speaking at the bank’s annual meetings in Sharm El Sheikh (watch, runtime: 3:31:35). The lender was tapped as the lead partner on NWFE’s water pillar last year.

More to come: The AfDB’s Just Green Transition initiative, which utilizes financial and technical support from the Climate Investment Funds to help African nations transition to “low-carbon and climate-resilient development,” has over USD 14.8 bn of projects in the pipeline for the NWFE program.

NWFE? The International Cooperation Ministry’s program seeks to raise blended finance for nine projects worth a combined USD 15 bn. These include a massive energy project, five projects in the field of agriculture and food security, and three in irrigation and water resources. The program was launched ahead of last year’s COP27 climate summit.

A lot of big names have already committed funds: The European Bank for Reconstruction and Development — the lead partner on NWFE’s energy pillar — has allocated USD 200-300 mn to the energy track of the program. The money will help Egypt to decommission 5 GW of gas-fired power plants starting this year. The International Fund for Agricultural Development (IFAD) is committing USD 200 mn to the food track, while a number of other organizations partnering with IFAD are providing another USD 775 mn.

AfDB is no stranger to Egypt’s water projects: The bank has lent the Madbouly government some USD 57.5 mn for wastewater treatment plant in Cairo’s Gabal El Asfar and USD 150 mn for the wastewater treatment plant in Abu Rawash.

SISI + MADBOULY IN SHARM-

President Abdel Fattah El Sisi held meetings with a number of African leaders — from Comoros, Zimbabwe, Burundi — on the sidelines of the meetings. He also held discussions with the COMESA secretary general, head of the African Union Development Agency, and head of the African Union Commission on all things trade and investment.

It was a busy day for Madbouly too: Prime Minister Moustafa Madbouly discussed healthcare cooperation and livestock imports with his Somali counterpart Hamza Abdi Barre. The PM also held talks with the Qatari Social Development Minister Maryam Al Misnad. The AfDB meetings run through to Friday.

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3

LEGISLATION WATCH

Officials call for legislative overhaul to boost Egyptian industry

Officials called for new legislation to reduce red tape for industrial projects during a session at the National Dialogue yesterday. Proposals for a ‘unified industrial law’ would merge the disparate legislation currently in effect and set up an authority tasked with eliminating bureaucratic hurdles and simplifying licensing rules for the sector.

There are too many laws that aren’t in alignment: The industry is currently governed by seven different laws, 15 legislative amendments and many presidential decrees, said the head of the House Industrial Committee, Moataz Mahmoud. ”Some of these are in conflict with each other and so now it is the right time to merge all of them into one unified industrial law that will help create an investor-friendly climate,” he said.

And too many governing bodies: “We have 17 ministries that deal with industrial activities in Egypt and all of these have to be merged into one system and regulated by one law,” Industrial Development Authority (IDA) chairman Mohamed Abdel Karim said.

GAFI x IDA: Mahmoud called for merging the General Authority for Freezones and Investment (GAFI) and the IDA into a single agency that would have sole regulatory authority for the industrial sector.

Boosting investment is a top priority amid the current crisis: Prime Minister Moustafa Madbouly last week unveiled 22 regulatory reformsaimed at making the country more attractive to foreign investors and increasing exports. The government is aiming to attract USD 40 bn in private investment by 2026 and increase exports to USD 100 bn a year by the middle of the decade by embarking on a series of structural reforms and reducing its involvement in the economy.

Industrial output is less than half of where it needs to be: There is a pressing need to raise the industrial sector’s contribution to the GDP to 40% from 16% currently, former finance minister and the dialogue’s economic rapporteur Ahmed Galal said. “The industrial sector in South Korea contributes 40% to GDP and we have to reach the same percent in Egypt in order to reduce imports and raise FX revenues … bureaucracy and conflicting laws are the only two reasons for the sector’s minimal contribution to Egypt’s GDP,” he said.

What’s next? Just like all of the recommendations brought up during the Dialogue, the proposal will be referred to its board of trustees to then be presented to President Abdel Fattah El Sisi.

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4

Investment Watch

Egypt-Oman investment fund to go live in 4Q 2023

Egypt-Oman fund could make investments before the year is out: The joint fund being set up by the Sovereign Fund of Egypt (SFE) and the Oman Investment Authority (OIA) plans to start making investments in 4Q 2023, the Planning Ministry said yesterday. The two sovereign wealth funds will finalize their plans for the joint fund next quarter, the statement said.

Priority sectors: The two wealth funds will target companies and projects in the pharma, food, and renewables sectors, the ministry said.

Background: Speaking to the media this week during Omani Sultan Haitham bin Tarek’s visit to Egypt, General Authority for Freezones and Investment (GAFI) head Hossam Heiba announced that the two sides would establish the fund, reviving a plan first floated almost four years ago. It will participate in the state privatization program, he said, declining to disclose its value.

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5

Energy

Energy China to ink framework agreement for green hydrogen plant by July

Energy China will within two months sign a framework agreement to build a green hydrogen plant in the Suez Canal Economic Zone (SCZone), the zone said in a statement yesterday. The plant is set to produce some 1.2 mn tons of green ammonia and 210k tons of green hydrogen annually, the statement reads. The company mentioned the plans in a meeting with SCZone CEO Walid Gamal El Din, who is leading a delegation in China and Hong Kong this week to promote investment in the zone.

Changing costs: The SCZone yesterday pegged the cost of the project at USD 7 bn, significantly above the initial USD 5.1 bn figureannounced by the Madbouly government in February.

Background: Energy China signed the initial MoU to conduct a feasibility study on the plant in December.

That’ll make 10: The government signed framework agreements for nine green hydrogen plants on the sidelines of last year’s COP27 climate summit. The projects would collectively require USD 83 bn of investment to complete, it said at the time.

ALSO FROM THE ROADSHOW-

China-Africa Development Fund backing? The SCZone delegation met with China-Africa Development Fund Chairman Song Lei, who expressed the fund’s readiness to fund Chinese projects wanting to invest in Egypt’s economic zones especially those working in green hydrogen, the SCZone said in a statement. The delegation also held talks with the head of the pharma group Gan & Lee and a number of manufacturers working in readymade garments, textile exports, and pharma production.

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6

Investment Watch

Egypt named among top emerging markets for foreign investment

Egypt ranks among top EMs for FDI: Egypt ranks 14th among emerging markets in terms of investor confidence, according to a new survey of global business execs. Almost a third of respondents polled suggested they were optimistic about Egypt’s investment outlook while 18% said they were pessimistic, according to global management consultancy Kearney’s FDI Confidence Index 2023.

About the study: Countries are ranked based on the responses of business leaders from across the world to questions about the likelihood of investing over the next three years.

Egypt has been accelerating efforts to attract fresh FDI as it looks to increase FX inflows and end the ongoing currency crisis. The Madbouly government last week unveiled a fresh package of pro-business regulatory reforms aimed at boosting investments and improving the country’s investment climate

Fourth in the region: Egypt ranked below the UAE, Saudi Arabia and Qatar, which all made the list of the top 25 FDI destinations in the world. Among EMs, China, India and the UAE made up the top three.

Confidence is global: Some 82% of companies said they plan to increase FDI over the next three years and 63% voiced optimism about the global economy, despite the ongoing headwinds caused by rising interest rates and the war in Ukraine.

What are investors after? When making an investment, investors look for transparency of government regulations, technological capabilities, and tax rates and ease of tax payments. Investors may also look at EMs instead of their developed counterparts due to their wide availability of raw materials, although political instability, an unfavorable regulatory environment, and poor infrastructure quality will keep the risk-averse away.

Investors are expecting an increase in globalization: More than half of the surveyed investors said they expect an increase in globalization over the coming three years, suggesting that “globalization is and will remain a central force in foreign direct investment in the years ahead.”

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7

EARNINGS WATCH

Madinet Masr profits more than double in 1Q 2023

EGX-listed real estate developer Madinet Masr reported EGP 304.4 mn in net income in 1Q 2023, up 153% y-o-y,according to its earnings release (pdf). Revenues climbed 24% y-o-y to EGP 1 bn during the period on the back of higher gross contracted sales.

Sales values were up even as unit volumes fell: Madinet Masr’s gross contracted sales rose 13% y-o-y to hit EGP 1.8 bn during 1Q 2023, marking a record for first-quarter sales. Nearly 70% of sales were at the company’s Taj City project, with the remainder at Sarai. The increase in sales value came even as the number of units sold dropped 41% y-o-y to 333. Deliveries also fell by 24% to number 276 units during the quarter.

Plus: Madinet Masr’s newly-acquired subsidiaries Minka and related special purpose vehicle EgyCan generated another EGP 544 mn in sales that didn’t show up in the company’s consolidated results for 1Q.

What they said: “Our vision for the future is best exemplified through our rebranded identity, which channels a new era of geographic expansion and strategic transformation as we look beyond Nasr City and East Cairo. We have ambitious projects in the pipeline as we continue our mission of transforming urban communities and shaping the real estate landscape,” CEO Abdallah Sallam said. Local media in April reported that the company plans to invest EGP 3 bn on expansions in 2023.

ICYMI- Sallam talked about the company’s expansion mindset during a panel at last week’s Enterprise Exports & FDI Forum.

SOUND SMART- In real estate, sales ≠ revenues. With off-plan sales dominating the industry, most real estate companies book a sale when you sign a contract to buy a home. But they only record (some or all) of the value of the unit it sold you when it (a) delivers the unit to you or (b) hits a percentage completion on a total project. In most cases, then, revenues are composed of sales from past periods, while sales in a given quarter will be recognized as revenues in the future when units are completed or delivered.

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8

Moves

Swvl closer to regaining compliance with Nasdaq audit regs

Swvl has appointed Ayman Ismail (LinkedIn) as chairman of its audit committee and an independent board member as it looks to regain compliance with a Nasdaq listing rule, the company said in a statementyesterday. The company has had only one person on its audit committee since April when two of its members resigned, putting it in breach of a Nasdaq rule that requires firms to have at least three people on the committee. The exchange warned the firm earlier this month that it has until 15 June to appoint two new members to the committee.

Ismail has more than 30 years of leadership experience in international companies: Ismail spent 20 years at Procter & Gamble before occupying senior positions at PepsiCo Egypt. He is currently board chairman at Endeavour Egypt and Mountain View, a member of the strategic advisory board at AUC and a board member at Kazyon.

Former assistant tourism minister Lamia Kamel (LinkedIn) has joined the Orascom Development Egypt board as a non executive member, Al Mal reported. Kamel was assistant tourism minister between 2021 and 2022 and she also founded two local PR agencies, CC Plus and Narrative PR.

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9

LAST NIGHT’S TALK SHOWS

Egyptian president calls on multilateral lenders to relax lending rules

On the airwaves last night: A recap of day two at the AfDB annual meetings, the latest on food prices, and more defense of the City of the Dead.

Day two of the AfDB meetings: The African Development Bank (AfDB) annual meetings in Sharm El Sheikh continued yesterday with the participation of a number of African leaders, including President Abdel Fattah El Sisi who highlighted the bank’s important role in helping struggling nations and providing them with financing solutions. “I take this opportunity to call on multilateral lenders to reconsider the standards and rules that qualify countries for funding facilities,” El Sisi said during his speech. Masa’a DMC had coverage (watch, runtime: 2:40).

More loans are not the answer, says Lamees: “The truth is we don’t want loans. We want investment. Developing countries, low-income countries don’t need loans with interest but rather investment,” Lamees El Hadidi argued on Kelma Akhira (watch, runtime: 4:21). We have more on the meetings in this morning’s news well, above.

It’s a mixed picture for food prices: After dedicating significant airtime to pharma pricesearlier in the week, El Hadidi focused last night on food prices, noting that poultry and egg prices have fallen in recent days after the government released more chicken feed into the market (watch, runtime: 2:45). Rice prices are also sliding due to recent imports from India, while oil and sugar prices remain stable and dairy products are expected to rise, she said. “All of this is related to the USD, port releases, and global food prices — some of which are dropping and some are rising,” she said.

Is there hope for the City of the Dead? The planned demolition of parts of the historic City of the Dead may not happen after all, with Masa’a DMC’s Ramy Radwan (watch, runtime: 4:44) quoting Cairo governor spokesperson Ibrahim Awad as saying that a final decision about whether to demolish some of its tombs hasn’t yet been taken. Radwan also echoed El Hadidi’s pleas from Tuesday, calling on authorities to find another way to carry out their development plans.

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10

Also on our Radar

The Egyptian state is setting up a new fertilizer chemicals company

INVESTMENT-

A new state fertilizers project: State-owned and EGX-listed Abu Qir Fertilizers, the Egyptian General Petroleum Corporation (EGPC), and Egyptian Petrochemicals Holding Company (ECHEM) partnered to launch a joint fertilizers venture, the Oil Ministry said Sunday. North Abu Qir for Agricultural Nutrients has a paid-up capital of EGP 1 bn, with Abu Qir and EGPC each holding a 45% stake and ECHEM holding the remaining 10%. North Abu Qir plans to produce some 2.4k tons of ammonium nitrate, 1.8k tons of nitric acid, and 1.2k tons of ammonia daily, the statement reads.

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11

PLANET FINANCE

Valuations among newly-listed companies are low — and private equity expects them to stay that way

PE firms are tired of waiting for US stocks to rebound: US private-equity backed follow-on offerings — when investors sell off more of their holdings in a firm that has already gone public — are up 180% y-o-y so far in 2023, according to data analysis from the Financial Times. But where a PE firm would usually wait for a listed company’s share price to appreciate before offloading more shares, some two-thirds of follow-ons went ahead at lower prices than when the companies debuted, the FT adds. That’s a sign that PE firms want to make money for their investors now and have given up waiting for an improvement in the price of listed portfolio firms that are trading at lower valuations thanks to a tighter economy. On the upside, more follow-ons could also herald an eventual return of IPOs, bankers argue, since the less risky transactions would likely pick up before fresh listings return in force.

UK to dodge recession: The IMF is no longer forecasting that the UK will fall into recession this year and now expects growth to slow to 0.4%, a 0.7 percentage-point upgrade, on strong wage growth, improved business sentiment, and lower energy prices. (IMF statement)

EGX30

16,788

+0.1% (YTD: +15.0%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,276

-0.5% (YTD: +7.6%)

ADX

9,490

-0.4% (YTD: -7.1%)

DFM

3,533

-0.5% (YTD: +5.9%)

S&P 500

4,146

-1.1% (YTD: +8.0%)

FTSE 100

7,763

-0.1% (YTD: +4.2%)

Euro Stoxx 50

4,342

-1.0% (YTD: +14.5%)

Brent crude

USD 77.74

+2.3%

Natural gas (Nymex)

USD 2.34

-2.4%

Gold

USD 1,995.40

0.0%

BTC

USD 27,237

+1.3% (YTD: +64.6%)

THE CLOSING BELL-

The EGX30 rose 0.1% at yesterday’s close on turnover of EGP 1.8 bn. Regional investors were net buyers. The index is up 15.0% YTD.

In the green: Oriental Weavers (+4.7%), Ibnsina Pharma (+3.6%) and Taaleem Management Services (+2.8%).

In the red: Sidi Kerir Petrochemicals (-1.7%), Cleopatra Hospitals (-1.4%) and Mopco (-1.4%).

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Our weekly deep-dive into infrastructure in Egypt.

Published every Wednesday in EnterpriseAM.

Read Hardhat
12

HARDHAT

A look at Egypt’s spending plans for the Hayah Karima initiative in FY 2023-24

What does the government have in store for spending on the Hayah Karima (Decent Life) initiative in the upcoming fiscal year? Earlier this month, Planning Minister Hala El Said and Finance Minister Mohamed Maait presented the government’s spending plans for FY 2023-24. The government’s proposed sustainable development plan (pdf) — which the ministry issues every year to work towards Egypt Vision 2030 — covers planned government spending on several key sectors, including education, infrastructure, the green economy, and manufacturing.

ICYMI- We’ve recapped the spending and development plans for transformative industries,education, the green economy, and nationwide infrastructure.

The sustainable development plan sees the government spending a total of EGP 180 bn on the Hayah Karima (Decent Life) initiative in the upcoming fiscal year, according to El Said’s statement to the House of Representatives. This figure covers the spending needed to complete the first phase of the initiative and launch its second phase to provide over 1.6k villages with essential services and infrastructure, as well as create jobs and ways to improve household incomes in rural areas.

What is Hayah Karima? Launched in 2019, the Hayah Karima Initiative is a far-reaching, multi-year infrastructure investment plan designed to develop the country’s rural areas. Running through to 2023, the five-year program aims to alleviate poverty in rural communities by revamping infrastructure, improving access to basic services such as education and healthcare, and creating jobs. The government has earmarked around USD 45-50 bn (c.EGP 700-790 bn) for the full program, El Said previously said (watch, runtime: 2:25).

Finishing the first phase is the top priority for spending on the initiative in FY 2023-24, with the government earmarking EGP 150 bn to complete projects under the first phase. The government had planned to spend EGP 200 bn on developing almost 1.1k villages around the country in FY 2021-22, with c.90% of the first phase projects completed in early 2022, Planning Ministry media advisor Mohamed El Okby told Enterprise at the time. The spending plan also earmarks an additional EGP 30 bn to kick off the second phase of the initiative.

Water and sewage projects in the first phase of the initiative are the largest recipient of investment in the upcoming fiscal year’s plan, with total investment of EGP 71.6 bn. Out of that sum, EGP 52.5 bn will cover building and upgrading 167 water treatment stations, 1,441 pumping stations, and developing 21.3k km of sewage networks. Also, EGP 19.1 bn will go to building 323 water purification plants, and upgrading water networks.

Electricity and irrigation projects come in second, with about EGP 40.8 bn going to electricity coverage and irrigation projects under the first and second phases of the initiative.Some EGP 28.4 bn is going to electricity projects to set up electricity networks for 1,446 villages, while roughly EGP 12.4 bn will be used to line and rehabilitate water canals spanning about 6.3k km, and set up 608 irrigation bridges.

Healthcare, telecommunications, roads and railways are also getting a big chunk in the upcoming fiscal year’s allocations for Hayah Karima, with some EGP 8.9 bn earmarked for the first phase healthcare projects, such as upgrading 24 central hospitals, 1.1k health units, and purchasing 367 ambulances. The upcoming fiscal year’s telecommunications investment budget for the initiative has earmarked EGP 5.6 to extend the fiber optics cable network to cover 1,468 villages. The plan also includes EGP 4.2 bn that will go to finish building 164 main roads and 166 railway stations, plus another EGP 2.6 bn for road pavement in 1,446 villages.

Also covered in the government’s plan for the initiative: Agriculture projects, building or developing government complexes and fire and police stations, supplying households with gas, and providing educational, youth, and sports services are getting a total investment of around EGP 8.1 bn. That’s in addition to EGP 5 bn for local development services, such as road services, lighting, security, and traffic projects.

Phase 2 cometh: For the second phase of the initiative, the allocated EGP 30 bn will fund 620 water and sewage projects, including lining and rehabilitating water canals spanning 1,740 km, upgrading 66 hospitals, and adding and upgrading up to 3k classrooms across 1.6k villages.

Your top infrastructure stories for the week:

  • State infrastructure spending for the year ahead: The government is proposing to invest a total of EGP 1.05 tn over the coming fiscal year, including EGP 587 bn of spending outlined in the FY 2023-2024 budget.
  • Privatizing power: Egypt has requested permission from German banks to sell shares in the three 4.8 GW Siemens-built power stations to investors.
  • Boosting green hydrogen: Ministers have approved a package of incentives aimed at stimulating Egypt’s nascent green hydrogen industry and increasing FX inflows.
  • New renewables partnership could be in the works: Infinity Power and Greek infrastructure investor Coupelouzos could jointly produce renewable energy in Egypt that would be sent to Europe via a planned electricity link.
  • New Alameda hospital: Alameda Healthcare will establish a branch of the Al Salam International Hospital in New Assiut as part of the company’s EGP 5 bn expansion plans.
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CALENDAR

MAY

17-31 May (Wednesday - Wednesday): Second round of applications for sixth phase of export subsidy program.

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

22-25 May (Monday-Thursday): HC Brokerage and Avior Capital Markets conference, virtual.

24 May (Wednesday): EFG Hermes will host its extraordinary general meeting.

25 May (Thursday): National Dialogue session.

25 May (Thursday): Deadline for Telecom Egypt employees to subscribe to share offering.

28 May (Sunday): House to reconvene.

28 May (Sunday): Turkish election run-off vote.

29 May (Monday): IEF-IGU Ministerial Gas Forum, Cairo.

29 May (Monday): Egyptian-Rwandan Investment and Trade Day, Helnan Landmark Hotel, Cairo.

30 May (Tuesday): Listed companies have until this date to report and publish their 1Q results.

JUNE

June: Indian representatives to discuss prospect investments in the Suez Canal.

June: Egyptian-Saudi business forum.

1-3 June (Thursday-Saturday): Fintech Industry retreat, Hurghada.

3-4 June (Saturday-Sunday): OPEC+ meeting, Vienna.

4 June (Sunday): Senate back in session.

7-10 (Wednesday-Saturday): The second edition of Africa Health Excon.

10 June (Saturday): Thanaweya Amma examinations begin.

12 June - 15 July (Monday-Saturday): Thanaweya Amma exams.

13-14 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

19-20 June (Monday-Tuesday): The forum for insolvency reforms and corporate restructuring in the Middle East and North Africa.

19-21 June (Monday-Wednesday): Egypt Infrastructure and Water Expo, Egypt International Exhibition Center.

19-21 June (Monday-Wednesday): Big 5 Construct, Egypt International Exhibition Center.

22 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

30 June (Friday): Egypt to exit Grains Trade Convention.

JULY

1 July: House of Representatives deadline to approve the FY 2023-2024 budget.

1 July: GAFI to launch the country’s first integrated electronic platform to facilitate setting up a business.

5 - 6 July (Monday - Tuesday): Gov’t to pay out subsidies to first wave of applicants under its sixth export subsidy program.

15 July (Saturday): Deadline for bids in EGPC’s mature oil fields tender.

18 July (Tuesday): Islamic New Year.

19 - 20 July (Wednesday - Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

25-26 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

AUGUST

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

2 - 3 August (Wednesday - Thursday): Gov’t to pay out subsidies to second wave of applicants under its sixth export subsidy program.

3 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

10 August (Thursday): Shalateen Mineral Resources gold mining tender closes.

22-24 August (Tuesday-Thursday): BRICS summit, Johannesburg, South Africa.

SEPTEMBER

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

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

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

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

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

21-23 September (Thursday-Saturday): Narrative PR Summit, Somabay.

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.

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

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

OCTOBER

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

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

6 October (Friday): Armed Forces Day.

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

Late October-14 November: 3Q2023 earnings season.

26 October (Thursday): Daylight saving time ends.

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

NOVEMBER

November: Cairo to hostIntra-African Trade Fair.

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

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

DECEMBER

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

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

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.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

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.

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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