Cabinet green lights EUR 1 bn in EU funding, renewable energy projects

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What We're Tracking Today

Bonyan to head to KSA, UAE to promote upcoming IPO

Good morning, folks. After a pretty busy start to the month for local business news, the last week of the month is off to an unusually calm start. In today’s unusually cabinet-heavy of EnterpriseAM Egypt, we’ve got a rundown of the EU funds and renewable projects just greenlit by the cabinet, new energy targets and tax plans courtesy of Madbouly’s latest presser, and much more.

WATCH THIS SPACE-

#1- Bonyan is one step closer to its IPO: Compass Capital real estate subsidiary Bonyan is planning to hold roadshows next month to promote its upcoming IPO on the EGX, Al Borsa reports, citing anonymous sources. The roadshows, which will be conducted by Bonyan’s IPO managers CI Capital and Arqaam Capital, will reportedly be launched in a number of countries including Saudi Arabia and the UAE.

A larger IPO than expected? Bonyan plans to raise some EGP 7-8 bn by IPOing before the end of the year, the outlet reports. It had been reported last month that Bonyan is planning to offer a USD 120 mn (EGP 5.8 bn) stake in the upcoming initial public offering.

New legal crew on board: Bonyan has reportedly tapped Matouk Bassiouny & Hennawy as legal counsel.

#2- The ministerial group for industrial development will soon review its definition of what constitutes a small project, with the maximum revenue limit under the SMEs Act set to be increased to align with the current exchange rate, according to a statement from the ministerial group. The current annual revenue or sales cap for an operation to be classified as a small project is set at EGP 50 mn, while its minimum is EGP 1 mn.

CIRCLE YOUR CALENDAR-

East Port Said cargo terminal #2 will go live in 2Q 2025, the SCZone said in a statement. Under the new cabinet’s infrastructure plan for the next three years, East Port Said Port is set to see its present capacity of some 3.8 mn export and import containers increase to 4.8 mn containers by the end of the current fiscal year and 5.3 mn containers by 2030. The port’s capacity for transit containers is also lined up to top 5 mn by 2030.

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

PSA-

WEATHER- It’s a sunny day in Cairo today, with a high of 35°C and a low of 26°C, according to our favorite weather app.

It’s almost as hot in Alexandria and along the North Coast, with a high of 33°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.

DATA POINT-

Some 41.8 mn Egyptians were banked in June 2024 — with bank, Egypt Post accounts, mobile wallets, or prepaid cards — representing 71.5% of eligible citizens, according to a statement (pdf) from the Central Bank of Egypt. Financial inclusion in June was up 181% since 2016.

RED SEA WATCH-

Houthi attack on oil tanker risks regional ecological disaster: Yemen’s Houthis on Wednesday blew up a passing Greek-owned oil tanker carrying 150k tonnes of crude oil in the Red Sea. The armed group said in a statement announcing the attack that the company that operates the boat had “violated” the “Yemeni Armed Forces’ ban on entering the occupied Palestinian ports.” Although the crew of 29 mariners were rescued from the vessel — dubbed Sounion — on Thursday after it initially caught fire following attacks, the EU’s naval operation in the region warned that oil from the ship could lead to a “severe ecological disaster with potentially devastating effects on the region’s biodiversity.”

This is more bad news for our Suez Canal transit receipts, which fell 23.4% y-o-y in the previous fiscal year to USD 7.2 bn on the back of Houthi attacks pushing shipping companies to reroute around the Cape of Good Hope for the foreseeable future.

THE BIG STORY ABROAD-

As is often the case on Sundays, it’s relatively quiet in the international business press, but NASA choosing Elon Musk’s SpaceX to bring back two of its astronauts at the International Space Station (ISS) is making the rounds.

The US space agency decided to bring Boeing’s Starliner capsule back to earth without its two crew members, NASA boss Bill Nelson said yesterday, after the Starliner saw technical failures that resulted in the two astronauts being stuck in space for months longer than expected. The astronauts will now remain on the ISS until late September, at which point they will board a SpaceX capsule with two other astronauts. The SpaceX spacecraft will be starting a six-month mission, meaning the stranded astronauts will return to Earth in February. (Reuters | Bloomberg | Wall Street Journal | Financial Times | Washington Post | CNBC)

Beauty unveiled amidst ancient wonders: Celebrate the beauty, nature, and cultural legacy of 30 nations as Miss Elite 2024 returns to the enchanting shores of Somabay from 2-14 September. For the fourth consecutive year, Somabay is hosting this prestigious international beauty pageant, celebrating women’s beauty and intelligence on a global scale. Experience the fusion of antiquity and modern elegance by attending the Grand Finale on 13 September at Mazeej Soma Beach Platform.

Egypt’s cabinet approves over EUR 1 bn in EU funding

EU funds are coming our way: The Madbouly cabinet had a busy Thursday, approving a long list of decisions, most notably pre-agreed upon funding from the EU.

Financing agreements with the EU: The cabinet approved presidential decrees regarding three financing agreements with the EU, which will see us unlock over EUR 1 bn in funding.

#1- EUR 1 bn in macro-financial assistance: The funds are expected to be disbursed before the end of the year and will be delivered in the form of soft-financing with long repayment terms and low interest. This will be the first tranche of a batch of concessional loans that will total some EUR 5 bn, with the rest planned for disbursement between 2025-2027.

Where it will go: The funds will go towards alleviating external financing constraints, easing the government’s balance of payments and budget needs, and boosting FX reserves, which will in turn boost macroeconomic stability, competitiveness, improve the business environment, and support our green transition.

Remember: The total EUR 5 bn in concessional loans stems from a wider EUR 7.4 bn package of loans, grants, and investments through 2027 that was agreed to under a joint strategic and comprehensive partnership inked between the two sides back in March. In addition to the EUR 5 bn in macro-financial assistance, the EU pledged EUR 1.8 bn of “additional” investments under the Southern Neighborhood Economic and Investment Plan and EUR 600 mn in grants, including EUR 200 mn for migration management.

#2- EUR 8 mn for child protection: The EU will grant us another EUR 8 mn to bolster Egypt’s child protection systems, focusing on implementing child protection frameworks and combating child labor as well as ensuring children’s access to education, healthcare, nutrition, and housing.

The details: The funds will go to the Social Solidarity Ministry and the National Council for Childhood and Motherhood.

#3- An agreement for EUR 3 mn will support the local manufacturing and development of vaccines and meds.

We knew this was coming: The EU signed four financing agreements with Egypt this summer to provide almost EUR 300 mn to support the development of the country’s private sector, labor force, child protection systems, and meds and vaccine manufacturing.

ALSO APPROVED- The cabinet also greenlit a number of renewable and infrastructure projects, which include:

#1- More renewables on the way: Cabinet approved the procedures to install UAE’s Masdar, Hassan Allam Utilities, and Infinity Power ’s solar project, which will have a capacity of 1.2 GW of energy and 240 MW/hour of storage batteries. The consortium’s proposal to begin studying the possible implementation of a 4-GW solar power plant also received the go-ahead.

REMEMBER- These three companies have a lot in the pipeline for Egypt: Only last week, Masdar, Infinity Power, and the Egyptian Electricity Transmission Company inking a trilateral purchase power agreement to build a 200 MW wind farm in Ras Ghareb. Masdar, Infinity Power, and Hassan Allam Utilities are also building a USD 10 bn, 10 GW wind farm project in Sohag that is set to be one of the largest wind farms globally and the largest in Africa. The trio, along with global energy giant BP, will also set up a USD 15 bn green hydrogen project in the SCZone.

#2- More projects by AMEA Power: Cabinet also approved the implementation procedures of solar and wind energy projects for UAE’s AMEA Power and its proposal to set up a battery storage project.

AMEA is also no stranger to Egypt: Amea is currently working on 1 GW-worth of renewable projects in Egypt — a 500 MW solar Abydos plant which is set to begin operations by the end of September, as well as a 500 MW wind farm in Ras Ghareb that is lined up for completion mid-2025.

#3- Dry port and logistics zone in Borg El Arab: The Transport Ministry got the thumbs up from the cabinet to proceed with contracting an unnamed company to finance, design, establish, manage, and maintain the planned dry port and logistics zone in Borg El Arab. The project will be carried out over a 30-year period.

We have an idea who the unnamed company may be: Last year, Egyptian company Ocean Express Shipping signed an MoU with the General Authority for Land and Dry Ports to study, establish, manage and operate the planned dry port at Borg El Arab.

Egypt’s Madbouly announces ambitious renewables plan, tax reforms

Madbouly talks energy, taxes during latest presser: Prime minister Moustafa Madbouly touched on several issues during his weekly press conference, those include energy supplies, tax reforms, among other key issues, according to cabinet statements (here, here).

#1- The plan to boost energy supplies: The Oil Minister will be meeting with foreign energy players starting this week to look into boosting local production starting early 2025.

Remember: The government has set aside USD 1.2 bn for energy imports this summer to help fill a supply gap and put a temporary end to blackouts during the hottest months of the year. After becoming a net exporter of LNG in 2018 and signaling its intention to become an important energy exporter to the region and Europe, production falls and rising domestic demand led to Egypt having to ramp up imports to bridge the supply gap.

#2- A very ambitious renewables target: The state aims to add 28 GW of renewable energy to the country’s energy mix over the next 5-7 years, Madbouly said. He previously said that 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.

#3- Fresh investment incentives incoming? The government plans to announce “revolutionary” tax reforms next month, Madbouly said, adding that the reforms aim to meet investor demands and encourage exports.

#4- Don’t hold your breath waiting for wage hikes: Madbouly ruled out fresh wage hikes with the anticipated social support package, saying that “since the latest wage hike was recent, it will be a while before we consider raising wages again.”

Remember: Two government sources told Enterprise earlier this month that the government is getting ready to roll out a new package of social protection measures in September, with plans to implement it starting October. The package reportedly includes pension increases, alongside other forms of support for low-income households to mitigate the impact of inflationary pressures.

Palm Hills Developments’ net income nearly doubles y-o-y in 2Q 2024

Palm Hills Developments (PHD) saw its topline rise 39% y-o-y to EGP 4.7 bn in 2Q 2024, according to the developer’s latest earning release (pdf). Net income after tax and minority interest nearly doubled, rising 97% y-o-y to record EGP 701 mn during the same period.

An even better 1H 2024: For the first half of the year, PHD’s revenues rose 58% y-o-y to EGP 10.9 bn. Meanwhile, the property developer’s net income after tax and minority interest surged 180% y-o-y during the six-month period, standing at EGP 1.7 bn,

Record-breaking sales: New sales hit an all-time high EGP 65.5 bn in 1H 2024, up 233% y-o-y “fueled by North Coast, West Cairo and Badya sales.” West Cairo sales grew 3x during the period to EGP 18.7 bn, making up 29% of the developer’s total new sales for the six-month period.

What they said: “This exceptional performance which reflects the trust of our customers and resilience of our brand equity continued during the third quarter, leading to an all-time new sales crossing c. EGP 110 bn-mark until 20 August 2024, more than four-fold increase year-on-year,” executive chairman Yasseen Mansour said.

Marakez, Adrère Amellal are setting up an ecolodge in Ras El Hekma’s Ramla

Our friends at mixed-use real estate developer Marakez have partnered with Adrère Amellal to bring a 71-room-and-suite ecolodge to Ramla, Ras El Hekma, Marakez’s signature project on the North Coast, the developer said in a statement (pdf). Adrère Amellal is the developer and operator of the unique 54-room ecolodge of the same name in Siwa Oasis, which first opened its doors in 2000.

What we know: Construction of the Adrère Amellal “The Ramla Nature Lodge” will begin towards the end of this year with its opening scheduled for 2027. First deliveries at Ramla will begin by next summer.

What they said: “We are committed to pushing the boundaries of development by creating spaces that are not only luxurious, but also deeply rooted in sustainability and community,” said Marakez Executive Vice-Chairman Dasha Badrawi. “The Adrère Amellal hotel at Ramla is a testament to our dedication to crafting unique experiences which resonate with international travelers and Egyptians alike.”

Why it matters: The Siwa ecolodge is one of the most visible pillars of the tourism industry, generating interest and publicity far out of proportion to its size. It’s regularly written up in the global travel press and has welcomed high-profile guests including King Charles III and Queen Camilla, the actors Juliette Binoche and Isabella Rossellini, the late artist Peter Beard, and Greek Prime Minister Kyriakos Mitsotakis, among dozens of others.

Why we like Ramla: 1.4 km of pure white sand and crystal-clear water — what more do you want in summer?

Ceasefire talks in Cairo dominated the airwaves last night

Talks in Cairo to end Israel’s 323 day war on Gaza were the main topic of conversation on the airwaves last night: A Hamas delegation arrived in Cairo yesterday to review any proposals that arise from ongoing negotiations between Israel, Egypt, Qatar, and the US, but will not participate directly in the negotiations, which it has been boycotting for over a week. Instead, the delegation will meet with Egyptian intelligence officials to “hear the results” of the ongoing round of talks, the New York Times quotes a statement by Hamas as saying.

The talk shows were united in who to blame for the lack of a ceasefire agreement: "Whenever a breakthrough is near, Netanyahu introduces a new complication to delay negotiations,” said Ala Mas’ouleety’s Ahmed Moussa said (watch, runtime: 0:59). “Everyone wants peace except for one person, and that is Netanyahu," he said. Netanyahu wants to prolong the war until the US presidential elections on 5 November, hoping for Donald Trump’s victory to further his goals, Al Ahram’s Gamil Afifi said in a phone call with El Sa’a El Sadesa’s Azza Mostafa (watch, runtime: 5:52). The Israeli prime minister consistently derails negotiations by either setting prohibitive conditions or rejecting Hamas' proposals, Afifi said, adding that Netanyahu ultimately aims to prolong negotiations by expanding the conflict’s regional scope.

El Sisi + Biden chat over the phone: President Abdel Fattah El Sisi discussed the latest developments in ceasefire negotiations during a phone call with US President Joe Biden on Friday, according to an Ittihadeya statement. The pair stressed the need for all parties to remain flexible and committed to overcoming hurdles. Salet El Tahrir’s Faten Abdel Maaboud had coverage (watch, runtime: 2:11).

Malaysia’s Proton to start producing locally made autos in early 2025. PLUS: Talgo, Aton + Ankh + Centamin, IFC + Tanmiya Capital Ventures, Fujifilm

AUTOMOTIVE-

Locally-made Proton Saga to come: Malaysian automaker Proton will start locally assembling its Saga model in early 2025 with the aim of producing some 25k units between the start of manufacturing and end of 2027, Proton Egypt General Manager Bassem Ashmawy told Asharq Business. The company plans to invest some EGP 2 bn during the first two years of production, which will take place at the Ezz Elsewedy Automotive Factories.

Remember: Elsewedy Electric sister company Elsewedy Capital and automotive group Ezz El Arab launched joint venture Ezz Elsewedy Automotive Factories late last year to assemble petrol and electric vehicles. The JV was set to receive more than USD 15 mn of investment to assemble 50k Proton-branded petrol cars and EVs annually in the “coming years.”

DEBT-

We’re in line for EUR 200 mn from Spain to import sleeper trains from Spanish rail manufacturer Talgo after President Abdel Fattah El Sisi approved the agreement, according to a decree published in the Official Gazette. The loan agreement was voted on by the House back in June and comes as part of a larger plan to boost Egypt’s railway capacity.

MINING-

A lot of mining investments ahead: Canadian gold miner Aton Resources, Arab Nubian Shield-focussed Ankh Resources and LSE- and TSX-listed gold mining company Centamin are set to invest a total of EGP 2.5 bn on gold exploration projects over the next two years, A l M al reports, citing unnamed sources in the mining sector. Aton Resources is set to contribute the lion’s share of the investments, as the company looks to start extracting gold from its Abu Marawat concession in the Eastern Desert by 2026.

INVESTMENT-

IFC wants to funnel up to USD 20 mn into midcap fund TCV II: The International Finance Corporation (IFC) is looking into investing up to USD 20 mn in Tanmiya Capital Ventures’ TCV II fund, it said in a statement. The Egypt-focused fund, which is targeting USD 150 mn, plans to invest in medium-sized companies across different sectors — including F&B, logistics, pharma, healthcare, and higher education.

The IFC isn’t the only one that wants in on the fund: The European Bank for Reconstruction and Development (EBRD) announced back in April that it will invest some USD 20 mn in the fund, while local media reported that the Egyptian-American Enterprise Fund will extend another USD 50 mn in financing.

HEALTHCARE-

Fujifilm to help digitize our healthcare system: Fujifilm Middle East is looking to partner up with the Egyptian Healthcare Authority to introduce tech solutions to our healthcare system that include teleradiology, AI, and virtual hospitals, according to a statement. The company will be inaugurating its Egypt headquarters next month, the statement adds.

ICYMI: Earlier this summer, Fujifilm said it plans to expand its investments in medical diagnosis and radiology in Egypt.

Fed chief signals September rate cut as economic risks shift

The “time has come” for rate cuts in the US: Federal Reserve Chair Jerome Powell indicated his readiness to start cutting interest rates in September during his address at the Fed’s annual retreat in Jackson Hole on Friday — read the speech or (watch, runtime: 16:06). Powell emphasized that “the time has come for policy to adjust,” citing cooling inflation and slowing job growth.

Behind Powell’s comments was a more optimistic inflationary forecast: US inflation fell under the 3% mark in July for the first time since March 2021, strengthening the case for the Fed to cut interest rates. The figure undercut economists’ expectations that inflation would hold steady at 3% and helped to support Powell’s argument at Jackson Hole that “inflation is on a sustainable path back to 2%.”

Rising concerns about the labor market are also pushing the Fed to take actions: “The upside risks to inflation have diminished, and the downside risks to employment have increased,” Powell explained. With the US unemployment rate rising to a near three-year high of 4.3% in July, which in turn raised recession fears and triggered a market meltdown at the start of August, the Fed is now weighing how confident it is the economy’s inflationary trajectory with a desire not to see “further cooling in labor market conditions.”

The odds: Markets now see a 35% chance of a larger-than-usual 50 bps cut in September, up from 28% before Powell’s remarks, according to the Financial Times.

Market reax: US Treasuries rallied and the USD fell as investors priced in larger rate cuts this year following Powell’s comments on Friday before the markets closed for the weekend. The two-year Treasury yield dropped 0.1 percentage points to 3.9%, while the S&P 500 closed up 1.2% on Friday, approaching July's all-time high.

What’s next? The Fed will meet on 17-18 September to review rates, six weeks before the US presidential election. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell said.

EGX30	30,141	+0.8% (YTD: +21.1%)
USD (CBE)	Buy 48.73	Sell 48.86
USD (CIB)	Buy 48.73	Sell 48.83
Interest rates (CBE)	27.25% deposit	28.25% lending
Tadawul	12,194	+0.1% (YTD: +1.9%)
ADX	9,374	0.0% (YTD: -2.1%)
DFM	4,293	-0.4% (YTD: +5.7%)
S&P 500	5,635	+1.2% (YTD: +18.1%)
FTSE 100	8,328	+0.5% (YTD: +7.7%)
Euro Stoxx 50	4,909	+0.5% (YTD: +8.6%)
Brent crude	USD 79.02	+2.3%
Natural gas (Nymex)	USD 2.02	-1.5%
Gold	USD 2,546	+1.2%
BTC	USD 64,050.10	+0.7% (YTD: +51.9%)

THE CLOSING BELL-

The EGX30 rose 0.8% at Thursday’s close on turnover of EGP 5.3 bn (45.5% above the 90-day average). Local investors were net sellers. The index is up 21.1% YTD.

In the green: Ezz Steel (+7.3%), Eastern Company (+3.6%), and Madinet Masr (+3.4%).

In the red: E-finance (-4.7%), Oriental Weavers (-4.2%), and Elsewedy Electric (-3.1%).

CALENDAR

2024

AUGUST

August 2024: Shalateen to announce gold exploration tender winner.

SEPTEMBER

2-3 September (Monday-Tuesday): The Seamless North Africa conference, Cairo.

3-5 September (Tuesday-Thursday): Egypt International Airshow, El Alamein International Airport.

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

9-12 September (Monday-Thursday): The annual EFG Hermes London Conference.

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

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

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

OCTOBER

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

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.

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

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

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.

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.

September 2024: US-Egypt Strategic Dialogue, Cairo.

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

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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