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Monday, 16 Sep 2024

What We’re Tracking Today
Energy
Energy
Diplomacy
Education
Investment Watch
Last Night’s Talk Shows
Also On Our Radar
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AMEA Power to invest USD 800 mn to develop Africa’s largest solar power plant and battery storage projects in Upper Egypt

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Today at a glance

1

Energy

Egypt secures 20 LNG cargoes for some USD 907 mn to cover winter demand.
2

Energy

AMEA Power to build 1 GW solar power plant and battery storage projects in Upper Egypt.
3

Diplomacy

Madbouly, Kouchouck, El Khatib land in Riyadh on diplomatic mission to boost trade, investment.
4

ALSO ON OUR RADAR

Gov’t wants to launch over USD 300 mn worth of PPPs at Dekheila Port.
5

Education

Lighthouse Education to shut down before operations kick off.
6

INVESTMENT WATCH

Bayt El Khebra is setting up a EGP 15 bn investment fund.
7

PLANET FINANCE

The big question of the week: How far will the Fed go?
8

BLACKBOARD

How are state plans to increase the number of international students enrolled in state universities playing out?

Monday, 16 Sep 2024

What We’re Tracking Today
Energy
Energy
Diplomacy
Education
Investment Watch
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Blackboard
Calendar
1

WHAT WE’RE TRACKING TODAY

Is Ras Banas the new Ras El Hekma?

Good morning, and a warm welcome back after the long weekend. We’re kicking off the shorter-than-usual work week with an issue packed to the brim with energy news, diplomatic efforts, investment updates, and more.

But before we get started, we’re almost a week away from this year’s EnterpriseAM Finance Forum, taking place on Tuesday, 24 September, and we’re taking the lid off the agenda

Headlining the EnterpriseAM Finance Forum: We’ll be joined for the first time on stage by a senior government official, who’s joining us to outline a vision for where we’re going as a community and as an economy. The keynote interview will get underway at 9am sharp, and you won’t want to miss our exclusive networking breakfast from 8am.

Among the topics on the agenda, which you can view here:

  • Welcome to the hot seat — top industry CEOs set the tone by addressing the biggest (and toughest) questions of the day.
  • Looking from the outside in — what foreign investors and strategics think about Egypt right now.
  • The only asset class in town — It’s real estate or nothing. We’ll get into the ins and outs of the industry, how it’s financing itself, which areas (and price points) are next, and more.
  • Gazing into that crystal ball — The outlook for dealflow in 2025, from M&A and IPOs to securitization, FX and more.
  • A once in a generation opportunity? — A deep dive into the promise and pitfalls of the emerging energy economy.
  • Do we really love banking SMEs? — With NBFIs and fintech players staking their claims, banks are starting to take the SME market seriously.
  • The NBFI panel — The resilience of the Egyptian consumer is the business story of the decade. How are banks and NBFS players building sustainable businesses? What are the opportunities — and credit worries — in the B2B space?

Haven’t requested an invitation yet? Do it today — space is limited. Tap or click heretolet us know you’re interested.

** IMPORTANT NOTE — If you’ve already received your invitation on email, you *must* click through to confirm you’re attending.

PSA-

WEATHER- It’s a cooler than usual day in Cairo today, with a high of 33°C and a low of 24°C, according to our favorite weather app.

Temperatures are also down in Alexandria, with a high of 30°C and a low of 24°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

WATCH THIS SPACE-

Egypt prepares Ras Banas for Ras El Hekma-esque investment plan: The Madbouly government is in the process of drafting an investment plan to offer the Red Sea’s Ras Banas to private sector players in a transaction similar to ADQ’s Ras El Hekma USD 35 bn agreement, Housing Minister Sherif El Sherbiny told reporters on Saturday.

FX from foreign investors, EGP from local investors: Although investors from abroad will invest FX into projects, Egyptian investors will be able to use invest in EGP so as not to put further FX withdrawal strain on the Central Bank of Egypt and to avoid the blackmarket returning, El Sherbiny added.

HAPPENING TODAY-

The Egypt-UK investment conference is here: Our friends at HSBC, together with UK Export Finance and Egyptian-British Chamber of Commerce, are hosting the Egypt-UK Investment and Opportunities Forum in London today. The conference will showcase investment opportunities in Egypt across different sectors — including renewable energy, water, automotive, food processing, IT, and AI — to potential investors from the UK. It will also facilitate matchmaking between institutions of both countries, bringing together government representatives, business leaders, and senior executives.

On the agenda: The event will feature presentations by GAFI head Hossam Heiba on supporting a sustainable investment climate, SCZone head Walid Gamal El Din on the economic zone’s investment proposition, and Advisor to the Vice Finance Minister Nevine Mansour on economic reform. The presentations will be followed by two panel discussions with large local and international companies — the first of which will discuss Egypt’s growth potential and infrastructure and the second focusing on investment opportunities and success stories. The event will also offer three hours for one-on-one meetings (which must be scheduled in advance) and networking.

HAPPENING THIS WEEK-

#1- BEBA is on a mission to seek out investments in the UK: The British Egyptian Business Association (BEBA) is leading a business mission to the UK from 18-20 September under the theme Invest in Egypt: Your Gateway to Growth. The mission will include Finance Minister Ahmed Kouchouk, Investment Minister Hassan El Khatib, SCZone head Walid Gamal El Din, ACUD Chairman Khaled Abbas, and Financial Regulatory Authority boss Mohamed Farid, who will take part in ministerial sessions that aim to highlight the country’s “economic progress and ongoing reforms.”

#2- How will the fresh tax incentives be implemented? The Egyptian Tax Authority will unveil the implementation mechanisms of the recently-announced package of tax incentives this week, advisor to the head of the Tax Authority Saeed Fouad told Asharq Business.

Remember: The Madbouly government last week announced the first batch of new amendments to the tax system, which aim to ease the burden on taxpayers and build greater trust in the tax system, from filing tax returns to resolving disputes and integrating the informal economy.

CIRCLE YOUR CALENDAR-

The tenth edition of Techne Summit Alexandria will be held from 5-8 October in what event organizers bill as an “international multi-industry focused investment & entrepreneurship event that aims to impact multiple sectors and stakeholders of the startup communities in the Mediterranean region.” The four-day event is expected to draw in over 30k attendees, 1k startups, 200 investors, and 400 speakers who will take part in a “a diverse lineup of panels, fireside chats, roundtable discussions, workshops, meet-and-greets, one-on-one mentorship, networking events, community activities, and exhibitions.” Secure your tickets here.

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

THE BIG STORY ABROAD-

Business news is having a hard time getting ink on the digital front pages this morning as another possible Trump assassination late yesterday continues to dominate the global press. Republican presidential candidate Donald Trump was targeted in what appeared to be another assassination attempt yesterday while golfing at his golf course in West Palm Beach, Florida. Trump was deemed safe after US Secret Service agents attached to the former president spotted a rifle barrel in a bush and engaged the gunman in fire, before arresting a suspect later, who was identified as 58-year-old Ryan Routh.

Trump’s would-be assassins missed, but Harris’ attacks on his economic record seem to have hit on target, with US voters trusting the Democrat candidate to steward the US economy over her Republican challender a thin margin of 2 percentage points according to the latest FT-Michigan Ross poll, up 1 percentage point from last month, the Financial Times writes. Harris holds an even higher advantage among those that tuned into last week’s US presidential debate, with 48% saying that they trusted Harris more to manage the economy compared to Trump’s 42%.

WHILE IN BUSINESS NEWS- NYC-based VC firm Insight Partners is close to finalizing a new tech fund worth at least USD 10 bn in a sign that tech investors are tiptoeing back into what has been a very tepid VC market.

AND OVER IN THE MEDIA SPHERE- Berlin-based media giant Axel Springer may soon see an agreement to split up its profitable classifieds business — valued at USD 15 bn — and its media outlets, which include US news sites Politico and Business Insider in addition to German publications Bild and Die Welt.

*** 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’ll be looking at the government’s plans to attract more international foreign students into Egyptian public, national, and private universities, and how doing so could affect the number of university seats available for local students.

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For the first time in Egypt, Somabay is thrilled to host the legendary Amy Winehouse Band live in concert. Prepare for an unforgettable evening filled with soul, jazz and iconic hits as the band performs live at Somabay’s breathtaking The Marina in The Theater Somabay on 5 October. Set against the stunning backdrop of the Red Sea, this exclusive event promises a magical night of music and entertainment in a unique setting. #TheAmyWineHouseBand #OneParadiseAllSeasons #SomabayRedSea

2

Energy

Egypt secures 20 LNG cargoes for some USD 907 mn to cover winter demand. PLUS: Gov’t mulls hiking gas prices for factories

Egypt’s efforts to secure energy supplies and better balance the books amid a rising national energy bill are continuing at full speed, with the country securing its latest batch of shipments and talk of upcoming gas price hikes for industry as the government tries to phase out subsidies.

LNG SHIPMENTS BOOKED IN FOR OCTOBER TO DECEMBER-

More LNG shipments secured: The government has bought 20 cargoes of LNG for some USD 907 mn to cover domestic needs between October and December, unnamed sources told Reuters. The Egyptian General Petroleum Corporation (EGPC) awarded the tender under a six-month deferred payment plan.

Winter shipments are a bit of a rarity for Egypt: The tender marks the country’s first winter LNG tender since 2018, according to the newswire.

The suppliers: The tender was awarded to commodity trading giant Glencore, crude and oil trader Gunvor, MEX International, Trafigura, Vitol, Hartree, BB Energy, TotalEnergies, Shell, Saudi Aramco, and BP. “Aramco is said to have won the most number of cargoes, around 6-7, with the rest winning cargoes between 1 to 3,” according to S&P Global.

Remember: EGPC last week issued the tender for the 20 shipments, split between 17 shipments of LNG for its floating import terminal at Ain Sokhna, as well as three more cargoes for delivery to Jordan’s Aqaba, in one of the state-owned firm’s largest ever tenders. The tender closed on 12 September.

The details: The EGPC received offers from over 15 major firms at “very competitive rates that were 30-40% less than expected market prices,” a trading source told Reuters. The offers were around USD 1-plus per mn British thermal unit (BTU) premium to the benchmark Dutch TTF, which is around USD 0.60/mn BTU — “far less than market expectation.” The lower than expected premium partially came as a result of “confidence in EGPC” and its “strong ties” with global energy firms, one source told Reuters.

So how much are we paying? Egypt is paying some USD 45 mn per 3.5 ton BTU cargo — putting the total cost of all 20 cargoes at USD 907 mn, according to S&P Global.

The timeline: We’re getting seven deliveries next month, six in November, and seven in December.

More to come? “We will need to import another 17-20 shipments in 1Q 2025,” a government source told Enterprise last week.

MORE DETAILS ON INCOMING GAS PRICE HIKES FOR FACTORIES–

Gov’t mulls hiking gas prices for factories: The government has been conducting studies about increasing the price of natural gas supplies for the country’s industrial sector since July, a government source confirmed to Enterprise.

How much are we talking? A government source we spoke to told us that we can expect natural gas prices to see a 6-8% increase. Asharq Business reports that the government is expected to raise natural gas prices 10-30% from the current USD 5.75 per mn BTU, citing its own unnamed government officials. Asharq Business’ sources added that studies have determined that a mn BTU comes at a cost of USD 6. Al Arabiya reported that an unnamed government source told them that they see prices rising to USD 7-7.5 per mn BTU for steel players.

The final decision on prices largely depends on the state’s ability to provide factories with their natural gas needs, according to Al Arabiya’s sources. At the moment, the state can only supply factories with 70% of their gas needs.

We knew this was coming: A government source in the petroleum sector told Enterprise backin August that the government is looking into raising the price at which gas is offered to factories, saying that the current price of USD 5.75 per mn BTU is no longer viable due to the rising cost of natural gas supplies. Any price adjustment will take the preservation of subsidies into account to keep product prices stable, they added.

What does this mean for manufacturers? The price hike will push the operational costs of one ton of steel rebar to rise by USD 26, industry players told Al Arabiya, adding that this will definitely be rolled onto the final price tag at which the product is sold to customers. Meanwhile, sources from the fertilizer sector said that any increase in gas prices will be accompanied by a corresponding rise in the price of subsidized fertilizers. The ceramic industry has been excluded from the list of energy-intensive industries, our source said.

Gradually lifting gas subsidies: The government aims to gradually lift subsidies on natural gas until 2026 to avoid adding to inflationary pressures, our source said. “We are currently buying gas at around USD 12.5-13 per mn British thermal units,” and carrying on selling it at a subsidized price is unsustainable, our source added.

The sector is also facing electricity price hikes: Rates for industry increased this month to between EGP 1.74 and EGP 2.34 per kWh across high, medium, and low consumption industries, up from between EGP 1.10 and EGP 1.50 per kWh/month listed previously as average prices.

Homeowners and owners of natural gas vehicles shouldn’t worry about any incoming gas price hikes: The amount of gas that is directed to homes and vehicles accounts for less than 5% of the country’s total consumption, dwarfed by the share taken up by industry and electricity production, our source told us. Because of this, prices for homes and natural-gas powered vehicles are expected to stay put for now.

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3

Energy

AMEA Power to invest USD 800 mn to develop Africa’s largest solar power plant and battery storage projects in Upper Egypt. PLUS: Scatec, two int’l consortia set the wheels in motion on renewables projects.

The country’s fossil fuel imports and production efforts may be leading the conversation at the moment, but investor appetite for renewables is still strong, with numerous stories coming in over the long weekend of investors — both local and foreign — willing to put their money where their mouths are.

Refresher:The government wants to see 3-4 GW-worth of renewable energy projects go live and start feeding the national grid by next summer to fill the energy supply gap. This push is part of a broader plan to secure the country’s energy needs amid declining natural gas production and expanding electricity interconnection projects to enable exports to surrounding countries. In the longer run, the state aims to add 28 GW of renewable energy to the country’s energy mix over the next five to seven years.

UPPER EGYPT TO GET NEW SOLAR, BATTERY PROJECT COURTESY OF AMEA-

AMEA to funnel another USD 800 mn into our renewables sector: UAE’s AMEAPower will invest USD 800 mn to develop two renewable energy projects in Upper Egypt after inking new purchase power agreements (PPAs) with the Egyptian Electricity Transmission Company (EETC) on Thursday, according to a company statement.

The projects: The agreements will see AMEA develop a 1 GW solar power plant with 600 MWh battery storage system in Benban — expected to be Africa’s largest — and add 300 MWh of battery storage to its existing 500 MWAbydossolar power plant currently under construction in Kom Ombo.

Greening the economy: The two projects will provide renewable energy to over 769.8k homes, offsetting more than 2.3 mn tons of carbon emissions annually, and are expected to create around 2.5k jobs during peak construction.

A first for Egypt: AMEA, along with Norwegian renewables developer Scatec, are the first developers to undertake hybrid solar and battery projects in the country.

This will double AMEA’s solar and wind generation capacity: The two projects will double the company’s total capacity in the country to 2 GW of solar and wind projects — in addition to introducing a fresh 900 MWh worth of battery energy storage systems. Aside from its 500 MW Abydos solar plant, AMEA is also working on a 500 MW wind farm in Ras Ghareb dubbed Amunet.

The timelines: The Abydos solar plant is due to be completed by October, while the Amunet wind farm will be completed by 3Q 2025.

AND THE LA ON A NUMBER OF BREWING RENEWABLES PROJECTS-

#1- OC-Led consortium sets the wheels in motion on wind farm expansion: A consortium of Orascom Construction, Toyota Tsusho, and Engie inked a land usufruct agreement and a PPA with the EETC and the New and Renewable Energy Authority (NREA) for a project that will see the consortium add 150 MW of wind energy capacity to its 500 MW wind farm in the Gulf of Suez, according to a cabinet statement.

The timeline: The first 250 MW phase of the wind project is expected to go live in the last month of the year, begin feeding the national grid by Q3 2025, and wrap up the 150 MW extension by Q3 2025, the company said in a statement (pdf).

By the numbers: Once complete, the wind farm will reduce carbon emissions by 1.3 mn tons every year and provide power to over 1 mn homes.

#2- Inching closer to Scatec’s hybrid solar and battery storage project: Norway’s Scatec inked a 25-year power purchase agreement with the Egyptian Electricity Transmission Company EETC for its planned 1 GW solar and 100-200 MWh battery storage hybrid project in Egypt, it said on Thursday. The agreement was denominated in USD, the company said, without disclosing its value.

What’s next? Scatec is expected to break ground on the project in 1H 2025. It has signed a mandate letter for concessional financing with a number of development banks and will work on securing the funds as well as finalizing land lease and grid connection agreements.

#3- Fertiglobe is one step closer to its green ammonia export dreams: A consortium of Scatec, Fertiglobe, and Orascom Construction has inked two land usufruct agreements with EETC and NREA to set up a wind and a solar power plant that will feed their USD 500 mn green hydrogen plant. The green hydrogen is slated to come online in 2027. Cabinet approved the usufruct rights earlier this month.

The bigger picture: The green hydrogen plant — being set up by the consortium with the Sovereign Fund of Egypt and the EETC — will provide the green hydrogen needed for Fertiglobe to produce green ammonia at its ammonia plants. The green ammonia will then be exported to the EU under an offtake agreement with Germany’s H2Global.

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4

Diplomacy

Madbouly, Kouchouck, El Khatib land in Riyadh on diplomatic mission to boost trade, investment. PLUS: Egypt, Kuwait ink ten MoUs during joint committee

Trade and investment top the agenda of meetings with our GCC neighbors: During a high-level visit to the Saudi capital and the holding of the 13th session of the Egypt-Kuwait Joint Committee, numerous agreements were inked — an increasingly familiar story as our trade and investment relations with the Gulf continue to grow.

HIGH-LEVEL DELEGATION LANDS IN RIYADH FOR TRADE, INVESTMENT TALKS-

Madbouly, Kouchouk, and El Khatib visit Riyadh in effort to drum up more Saudi investment: Prime Minister Moustafa Madbouly touched down in Riyadh yesterday alongside Finance Minister Ahmed Kouchouk and Investment Minister Hassan El Khatib for talks with their Saudi counterparts aimed at strengthening trade and investment between the two countries, according to a ministry cabinet statement.

The talks focused on showcasing potential investments and Egypt’s ongoing economic reform program, with talks specifically honing in on the government’s newly released tax policy and efforts to eliminate barriers currently faced by Saudi investors. The Saudi side stressed Egypt’s “tremendous investment potential,” with Saudi commerce minister Majid bin Adbullah Al Kassabi pointing to the industrial, agricultural, and real estate sectors as particularly promising.

A bilateral investment agreement in the works? The two sides also made headway on an Agreement on Promotion and Mutual Protection of Investments between the two countries, which aims to help protect Saudi investors as they look to double their investments in the country in the coming period, according to Saudi investment minister Khalid Al Falih.

MORE EGYPT-KUWAIT COOPERATION AHEAD WITH TEN NEW MoUs-

The latest session of the Egypt-Kuwait Joint Committee came bearings lots of MoUs: Egypt and Kuwait signed ten MoUs across a number of sectors during the 13th session of the Egypt-Kuwait Joint Committee, which was co-chaired by Foreign Minister Badr Abdelatty and his Kuwaiti counterpart Abdullah Al Yahya, according to statements (here, here, and here).

The sectors in question: The two sides signed MoUs in the fields of tourism, housing, media, youth and sports, planning, competition protection, industrial exports, and environmental protection. They also inked an MoU to boolster cooperation between their diplomatic institutes.

More to come? Planning and International Cooperation Minister Rania Al Mashat with the Kuwaiti side discussed the drafting of additional MoUs in the fields of planning, sustainable development, capacity building, and international cooperation, according to a statement.

El Sisi talks regional affairs, cooperation with Al Yahya: President Abdel Fattah El Sisi met with Al Yahya during his time in Egypt and the “two sides confirmed mutual commitment to further advancing the work of the joint committee to serve the interests of both peoples,” according to an Ittihadiya statement. They also touched on the latest in Gaza and the need to achieve a ceasefire.

RENEWED CALLS FOR A TWO-STATE SOLUTION-

Fresh calls for a two-state solution: A ministerial meeting of Arab League and Organization of Islamic Cooperation members and representatives from Ireland, Norway, Slovenia, and Spain called for the “credible, irreversible implementation of the two-state solution in accordance with international law and agreed parameters” in Palestine, according to a joint statement from the participants. They also called for the full withdrawal of Israeli forces from Gaza — including the Philadelphi corridor — and the return of Palestinian control over the Rafah crossing. The participants warned against the “dangerous escalation in the West Bank and urge an immediate halt to military attacks against the Palestinians.”

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5

Education

Lighthouse Education to shut down before operations kick off

Lighthouse Education dims its light as construction costs surge: Education investment platform Lighthouse Education is shutting down before it could properly start to deploy any funds, just three years after the close of its first fundraising round, Asharq Business reports, citing two anonymous sources it says are familiar with the matter.

The float of the EGP spurred on the decision: The decision was prompted by the high cost of building schools following the float of the EGP, with the decision to close the fund presented as a way to avoid making losses.

A dollarized market is also partly to blame: The majority of investments in the education sector are conducted in USD, which put the fund in a bind following the float of the EGP and interest rate hikes, one of the sources said.

Lighthouse? The investment fund was launched in July 2021 by Misr Ins. Holding Company, the Sovereign Fund of Egypt, Banque Misr, and the Suez Canal Bank as well as Al Orman schools founder Hossam El Kabbany and financial advisor Ironwood Investments to channel investment into private K-12 schools.

Despite not lacking ambition, Lighthouse never ended up investing its money where it wanted: After reaching a first close of EGP 560 mn a few months after the fund was founded, the company announced plans to acquire majority stakes in at least two K12 private schools before the end of 2021, but we never got wind of any agreement coming to fruition. More recently, the company had plans in 2023 to acquire stakes in two primary schools before the start of the 2023-2024 academic year, but again we didn’t hear much more after the initial announcement. Instead of education-focussed investments, shareholders recently allocated 25% of platform’s total funds to treasury bills, one of the sources said.

The decision is still in the balance: The fund will hold a general assembly on 24 September to approve the liquidation.

ICYMI: We took a deep dive into how private and international schools are navigating elevated costs following the EGP float in a Blackboard earlier this year and reexamined some of the headwinds facing the sector, including stringent building requirements and land scarcity, in July.

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6

INVESTMENT WATCH

Egypt-based financial services provider Bayt El Khebra is setting up a EGP 15 bn investment fund

Bayt El Khebra has a EGP 15 bn fund brewing: Financial services and advisory group Bayt El Khebra is planning to set up an investment fund with capital exceeding EGP 15 bn, Al Arabiya reports, citing sources close to the matter. The fund will target tourism, real estate, and industrial projects.

Who’s in? Major companies — as of yet still unnamed — are expected to contribute to the fund’s capital, though Bayt El Khebra will provide the lion’s share of financing, the sources said.

Bayt El Khebra? The Cairo-based financial services and business advisory firm has an extensive portfolio of tourism assets — including hotels in Hurghada, around a quarter of the shares of both Nile Ritz-Carlton owner Misr Hotels and Safir Dahab Resort, roughly a fifth of the Egyptian Resorts Company, along with sizable stakes in numerous pharma, ins., and agricultural companies.

Beyond financing: The fund’s activities will extend beyond providing financing, as Bayt El Khebra plans to form partnerships with major companies operating in the country to finance real estate, tourism, and industrial projects, according to the sources. The fund will also engage in corporate restructuring and resale operations.

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7

LAST NIGHT’S TALK SHOWS

The tragic Zagazig train accident topped the agenda over the long weekend

Saturday’s harrowing Zagazig train crash — which injured 49 and killed 3 — dominated the talk shows over the past two days. Ahmed Moussa commented on the incident, stating that “the whole world witnesses train accidents, and a technical committee has been formed to investigate the incident… No facts will be hidden.” (watch, runtime: 6:23)

An investigation is underway: Public Prosecutor Mohamed Shawky opened an investigation shortly after the incident and the Transport minister formed a committee of railway experts to figure out what caused the collision between the two trains.

The accident got lots of ink in the foreign press: Reuters | CNN | The Guardian | AssociatedPress

AND- Our military agreement with Somalia gets some coverage on the talk show circuit: Speaking on Ahmed Moussa’s Ala Mas’ouleety, military expert Samir Farag confirmed that Egypt has not sent any military forces to Somalia, explaining that the country has instead dispatched a military mission to train and rearm the Somali army in response to conflicts with terrorist groups and the Somali army’s efforts to expel separatist forces in the Somaliland region. Farag’s statements came in response to statements by Somali Foreign Minister Ahmed Fiqi’s claim that Somalia had received military aid and ammunition from Egypt and that further agreements would be made with Cairo in the future (watch, runtime: 3:04). Farag explained that, starting in January, based on a request from the Somali government and approval from the African Union, Egyptian peacekeeping forces will be deployed in Somalia to replace the Ethiopian forces, whose mandate ends in December.

PLUS- Egyptian FM and intelligence chief’s trip to Eritrea, explained: Farag also noted that he believes that Egyptian intelligence chief Abbas Kamel and Foreign Minister Badr Abdelatty’s trip to Eritrea to meet President Isaias Afwerki is a means of securing Egypt’s national security regarding the entrance to the Suez Canal. Eritrea is viewed as a region controlling the entrance to the Bab El Mandab strait, alongside Somalia and Djibouti (watch, runtime: 3:38).

ALSO- The relief ship Abu Simbel-2 arrives in Sudan: The Abu Simbel-2 arrived in Sudan yesterday carrying 200 tons of medical supplies, medicines, and food, after President Abdel Fattah El Sisi ordered its dispatch (watch, runtime: 2:00).

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8

ALSO ON OUR RADAR

Gov’t wants to launch over USD 300 mn worth of PPPs at Dekheila Port. PLUS: Cairo International Airport, Le Mans, Citibank, Beyti, CI Capital

LOGISTICS-

#1- PPPs a plenty: The Transport Ministry has tasked the Finance Ministry’s public-private partnership (PPP) unit to prepare feasibility studies for three PPP projects at the Dekheila Port, a government source told Enterprise. The projects include a multi-purpose container terminal with an estimated cost of USD 300 mn, a dry port, and an industrial-purpose pipeline extension whose cost has not yet been determined, the source said.

The port’s development is almost halfway there: The Dekheila Port development plan has reached 45% completion, our source said.

ICYMI: The Alexandria Port Authority was last month reported to be gearing up to hand over the Dekheila dry bulk terminal, along with two other maritime terminals, to local and foreign operators before the end of the year. The 300k square meter dry bulk terminal was reportedly to be awarded to a consortium of three local firms, which were said to invest some USD 50 mn in the first phase of the project.

#2- Logistics hub project for Cairo International Airport in the cards? Chinese state-owned construction firm and China Energy subsidiary Gezhouba Group proposed establishing a “logistics cargo city” at Cairo International Airport during a meeting with the Aviation Ministry, according to a ministry statement . The statement did not provide any concrete details about the proposal, but said it would strengthen Egypt’s position as a logistics hub regionally and internationally, particularly in light of growing demand for air cargo services.

AUTOMOTIVE-

Le Mans plans to inject EUR 50 mn of over the next five years: Egyptian luxury auto importer Le Mans is targeting EUR 50 mn in new investments into the Egyptian market over the next five years, the company said in a press release (pdf). The company aims to invest in “new car showrooms, maintenance centers, and ambitious plans to grow in the transportation, shipping, customs clearance, and hybrid and EV import sectors,” with plans to open three new showrooms and two new maintenance centers this year.

GOVERNANCE-

Citibank Group is helping us strengthen macroeconomic policy: Officials from Citibank yesterday presented the government with proposals for macroeconomic policies during a meeting with Planning and International Cooperation Minister Rania Al Mashat. The bank highlighted potential priority areas and reviewed mechanisms for supporting macroeconomic stability, managing state-owned enterprises, attracting foreign investment, and accelerating the transition to renewable energy.

POLICY-

Gov’t forms committee to support startups: Prime Minister Moustafa Madbouly issued a decision to form a committee that aims to support the startup ecosystem in a bid to accelerate economic growth and job creation, according to a cabinet statement. Dubbed the Entrepreneurship Ministerial Group, the committee will be chaired by the Planning and International Cooperation Minister Rania Al Mashat and include several ministers and key representatives of government bodies.

What will the new body do? The committee will propose policies and legislation to support the entrepreneurial ecosystem, help startups access international markets and expand globally, and leverage startup solutions to address challenges in different sectors, among other tasks.

COMMODITIES-

#1- Our Ukrainian wheat shipment attacked: Ukrainian President Volodymyr Zelensky said viaTelegram that Russia had attacked a cargo ship in international waters carrying around 5-20k tonnes of wheat from Ukraine to Egypt on Thursday. The ship reportedly belonged to private Egyptian firm El Bostan and isn’t affiliated with any government entities, a government source reportedly told Asharq Business.

#2- More wheat incoming: State grains buyer GASC purchased 430k tons of Russian wheat last week at USD 235 per ton, according to a Supply Ministry statement. The wheat was bought in a direct purchase from Russian grain trader United Grain Company and is slated for an October shipment, according to what sources told Reuters. The purchase brings the country’s strategic wheat reserves to a level equivalent to 6.1 months of consumption, a few months behind our nine-month target.

Remember: The government is looking to capitalize on a global dip in prices as it looks to bolster strategic wheat reserves amid geopolitical tension. President Abdel Fattah El Sisi reportedly personally ordered GASC’s biggest ever tender in August after he received an intelligence briefing that raised concerns over our food security. The massive tender fell short of its target, with GASC purchasing 280k tons of the 3.8 mn tons it aimed to buy.

MANUFACTURING-

Beyti to begin making cheese: Dairy and juice producer Beyti will add cheese to its line of products with plans to inaugurate an EGP 1 bn cheese production line “soon,” according to a statement from the Agriculture Ministry. The announcement came during a meeting between Agriculture Minister Alaa Farouk and Beyti CEO Mark Wyllie last week, where the two talked up the potential of boosting the dairy maker’s investment in the country.

** Wyllie was our Manufacturer of the Month earlier this year. Read the interview here.

CAPITAL MARKETS-

CI Capital to launch five new equity investment funds with combined value of EGP 50 mn: CI Capital Asset Management plans to launch five sectoral equity investment funds with a total value of EGP 50 mn before year-end, the company said in a press release (pdf). The funds will focus on the real estate and building sector, the financial and fintech sector, the consumer sector, tech and telecom, and the export sector, with the company expecting the value of the funds to reach up to EGP 250 mn within a year.

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9

PLANET FINANCE

The big question of the week: How far will the Fed go?

It’s interest rate week — and speculations are still swirling around the Federal Reserve’s moves in its two-day meeting tomorrow and Wednesday, with analysts torn between the arguments for a 25 bps cut and a more aggressive 50 bps cut amid persistent inflation and a cooling job market.

In one corner: Conservative voices argue that inflation remains a concern — particularly in the services sector — and that a smaller rate cut would be a safer move.

And in the other: A rapidly cooling job market, which presents a more pressing risk than inflation, underpins the argument for a large rate cut, the Financial Times’ editorial board argues in an op-ed, saying that with inflation down to 2.5% — moving toward the targeted 2% — a significant rate cut would help stave off economic stagnation and support employment. The board also argues that the persistent inflationary factors are lagging behind actual market prices, and that useful indicators like wage growth, are tame by comparison.

Market expectations tilted toward a larger cut over the weekend, buoyed by signals from former Fed officials — meaning the central bank has the opportunity to take bold action without spooking investors, the FT’s board writes.

Regardless of the outcome of this week’s meeting, the journey to the end of the rate-cutting cycle remains fraught with uncertainty, writes Egyptian-American economist — and EnterpriseAM HQ favorite — Mohamed El Erian in a separate editorial for FT. He points out that US economic growth has been more robust than many anticipated, but this growth has not been evenly distributed. Lower-income households, in particular, are feeling the strain as pandemic savings dwindle and credit card debt rises. El Erian highlights the risk of this economic weakness spreading beyond lower-income households, which could further complicate the Fed’s decision-making process.

Global impact of US monetary policy: As the Fed navigates its rate-cutting cycle, emerging markets may also feel pressure to follow suit, leading to potential disruptions in international financial stability. El Erian emphasizes that while markets are optimistic about a “soft landing” for the US economy, this confidence may not fully account for the complexities of global financial dynamics, particularly in the bond markets.

MARKETS THIS MORNING-

Asian markets are mixed as Hong Kong’s Hang Seng fell 0.76% on the back of disappointing economic data from China — though markets in mainland China, Japan, and South Korea were closed for national holidays. Meanwhile, Wall Street futures are hovering around the flatline as investors hold their breath for the upcoming Fed meeting.

EGX30

30,498

0.04% (YTD: +22.5%)

USD (CBE)

Buy 48.37

Sell 48.51

USD (CIB)

Buy 48.38

Sell 48.48

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

11,900

+0.5% (YTD: -0.6%)

ADX

9,350

+0.5% (YTD: -2.4%)

DFM

4,380

+0.4% (YTD: +7.9%)

S&P 500

5,626

+0.5% (YTD: +18.0%)

FTSE 100

8,273

+0.4% (YTD: +7.0%)

Euro Stoxx 50

4,844

+0.6% (YTD: +7.1%)

Brent crude

USD 71.61

-0.5%

Natural gas (Nymex)

USD 2.31

-2.2%

Gold

USD 2,610.70

+1.2%

BTC

USD 59,619.40

-0.7% (YTD: +41.5%)

THE CLOSING BELL-

The EGX30 was almost flat at Thursday’s close on turnover of EGP 3.6 bn (7.4% below the 90-day average). Regional investors were the sole net sellers. The index is up 22.5% YTD.

In the green: Eastern Company (+4.5%), Egypt Kuwait Holding -EGP (+3.6%), and Egypt Kuwait Holding -USD (+1.4%).

In the red: Ezz Steel (-3.5%), AMOC (-3.4%), and Elsewedy Electric (-2.9%).

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Our weekly deep dive into education in Egypt, from K-12 to post-secondary.

Published every Monday in EnterpriseAM.

Read Blackboard
10

BLACKBOARD

How are Egypt’s plans to increase the number of international students enrolled in state universities playing out?

A deep dive into state efforts to attract more international students: The government is working to increase the number of international students enrolled in Egyptian universities as part of its efforts to boost educational tourism. So where do things currently stand and what makes Egyptian education appealing to foreigners?

An ambitious goal: The government wants to see 200k international students enrolled in Egyptian universities in 2030, a move which will help it reach its goal of attracting USD 2 bn in education tourism revenues by then, a source at the Higher Education Ministry told Enterprise.

In numbers: Egypt is expected to host 30k international students during the current academic year up from 26k last year, the source said. The number has been rising in recent years, jumping from 8.3k in the 2018-2019 academic year to 12.6k in 2019-2020 and to 18k the following year.

Why the increase? International student enrollment in Egyptian universities has seen a notable increase over the past few years. This comes as the government pushes to improve university rankings, set up more private and national universities, host branches of international universities, and form partnerships with major international universities across various specializations.

And more to come: The country has seen a boom in applicants registering on the government’s university admission portal Study in Egypt.

What universities are international students after? Cairo University is the most attractive university for international students, our source said, adding that Mansoura University, Alexandria University, Ain Shams University, and Assiut University come next on the list in terms of undergrad and grad programs.

Why this specific bunch? Education ministries in several Gulf and Arab countries only recognize certificates from Cairo, Alexandria, Mansoura, Assiut, and Ain Shams universities, Badr University President Mustafa Kamal told Enterprise. Study in Egypt helps students looking to enroll in public universities, while those seeking private and international universities go to these universities’ admission points directly.

There’s no limit to how many international students can join local universities, one government source told Enterprise, adding that all applicants who have completed their applications are accepted and distributed among the country’s public and national universities.

SOUND SMART: While both state and national universities are public universities operating under the supervision of the Supreme Council of Universities, state universities typically have higher admission thresholds and larger student bodies, while national universities offer smaller class sizes and more modern curricula. National universities also tend to have higher tuition fees and pricier accommodation compared to the more affordable, traditional housing at state universities.

Show me the money: Tuition fees for foreign students have increased significantly this academic year, according to data from the Study in Egypt platform. Fess vary greatly depending on the area of studies and university chosen, with medicine being the priciest area of studies going for USD 8k at Cairo, Mansoura, Alexandria, and Ain Shams universities. The figure has seen a major jump over the past few years, rising from USD 2.1k in the 2021-2022 academic year.

And on top of that: Foreign students pay an additional USD 1.5k registration fee during their first year of undergraduate studies.

High demand for Cairo University: The second oldest institution of higher education in the country is highly in demand by those coming in from abroad, seeing a 300% increase in the number foreign students enrolled over the past seven years. The university saw the international students count rising from a little under 8k students in 2016-2017 academic year to 24.6k students in 2023-2024, according to official data.

Where are these students coming from? Egypt attracts students from 100 countries, including the US, the UK, Germany, Russia, the Netherlands, France, Canada, and Hungary, along with GCC nationals from Kuwait, Saudi Arabia, the UAE, Qatar, Oman, and Bahrain.

Work is underway to attract more foreign students: The government is taking advantage of its cultural offices abroad to attract more international students into Egyptian universities, namely those from Iraq, Bahrain, Qatar, and China, sources told Enterprise.

What does this mean for Egyptian students? The available number of seats at universities for Thanaweya Amma graduates dipped this year, prompting the government to raise the acceptance score for public university enrollment (tansik) in the first phase, despite a decline in the average total compared to last year, a source told Enterprise. There has been a 30-60% decrease in the number of Egyptian students accepted in state universities this academic year.

The numbers tell the story: The minimum acceptance score for universities has jumped from 89.02% last year to 90.48% this academic year. The number of seats dedicated to international students at state universities goes between 10-15% of their total seats, head of Future University Abada Sarhan told Enterprise. He emphasized that the presence of students from other countries allows Egyptian students to learn about other cultures.

Fierce competition: While Egypt has made great strides in diversifying education offerings and raising its efficiency, there is still strong competition from British, American, and European universities, Sarhan noted. Therefore, despite Egyptian universities opening their doors to international students, more needs to be done to promote private universities in Arab countries, whose citizens prefer to study in public universities due to their accreditation.

Looking ahead: Egypt seeks to use its cultural offices to hold exhibitions and work on accrediting more of its universities by different countries, according to sources who spoke with Enterprise.

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CALENDAR

2024

SEPTEMBER

16 September (Monday): Egypt-UK Investment and Opportunities Forum, London.

18-20 September (Wednesday-Friday): BEBA mission to the UK, London.

24 September (Tuesday): Enterprise Finance Forum, Cairo, Egypt.

25-26 September (Wednesday-Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

25-28 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

29 September (Sunday): AmCham Egypt Real Estate Conference.

30 September (Monday): Ban on sugar exports expiration.

30 September (Monday): Portfolio Egypt 2024, Nile Ritz-Carlton, Cairo.

30 September (Monday): Egypt Business Forum, Paris.

OCTOBER

1 October (Tuesday): Egypt Business Forum, Marseille.

1-3 October (Tuesday-Thursday): Cairo Sustainable Energy Week, Cairo, Egypt.

5-8 October (Saturday- Tuesday): Techne Summit Alexandria, Biblioteca, Alexandria.

6 October (Sunday): Armed Forces Day.

10-12 October (Thursday-Saturday): Egy Health Expo, Egypt International Exhibition Center, Cairo.

10-12 October (Thursday-Saturday): The FinExpo Conference and Exhibition, Cairo.

13-17 October (Sunday-Thursday): Cairo Water Week, Water and Climate: Building Resilient Communities, Cairo, Egypt.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

20-22 October (Sunday-Tuesday): Mediterranean Offshore Conference (MOC), Alexandria, Egypt.

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

NOVEMBER

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

12-15 November (Tuesday-Friday): Arab African Investment and International Cooperation Summit, Aswan, Egypt.

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

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

30 November (Saturday): Deadline to apply for renewable energy projects under the peer-to-peer (P2P) system.

DECEMBER

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

EVENTS WITH NO SET DATE

2H 2024: Gov’t to launch the Cairo Ring Road BRT buses.

3Q 2024: Egyptian-Armenian Joint Committee.

September 2024: Turkish-Egyptian Business Council meeting in Turkey.

End of September: The Suez Canal Economic Zone (SCZone) roadshows in Paris and Marseille, France.

First week of November: Egypt-Turkey high-level trade consultation mechanism.

November 2024: Egypt to host the World Urban Forum (WUF12).

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

2025

May 2025: Egyptian Exporters Association (Expolink) exhibition, Italy.

July 2025: The first operational trail of Egypt-KSA electricity interconnection line.

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

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

EVENTS WITH NO SET DATE

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

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