Egypt plans to end credit disbursement friction with new centralized fund

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WHAT WE’RE TRACKING TODAY

Newly unveiled Startup Charter aims for USD 5 bn in funding and a unicorn factory

Good morning, friends. We kick off today’s issue and workweek with news that the Madbouly cabinet is moving to eliminate the long-standing friction in government lending with a planned EGP 250 bn centralized fund for concessional financing. The initiative aims to bypass much of the bureaucracy many of our readers know only too well and has historically stalled credit disbursement for the industrial and tourism sectors.

Yesterday also marked a milestone morning for the local ecosystem as the government officially unveiled its Startup Charter, which laid out a roadmap targeting USD 5 bn in VC funding and the creation of five unicorns by 2031. This comes as fresh data from Briter highlights Cairo’s evolution beyond the traditional equity model, with mature players increasingly leveraging sophisticated debt instruments to scale.

Also in today’s issue is news that Elsewedy Electric and CIB take Egyptian capital and expertise to Hungary for a massive power plant project, plans for a sodium-ion battery component production, Exxon Mobil and Qatar Energy exiting their North Marakia block, talk of the Fund’s Executive Board to greenlight USD 2.3 bn tranche in February, and much, much more.

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WISH THIS MORNING’S ISSUE was a podcast? We’ve got you. Tap or click here to listen to Morning Drive, a 10-minute version of today’s issue crafted for you to enjoy with your morning coffee, while getting the kids ready for school, or while stomping around the house wondering where the [redacted] you left your [redacted] reading glasses.
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Watch this space

The Ministerial Group for Entrepreneurship is looking to attract USD 5 bn in VC investment over the next five years under its long-awaited Egypt S tartup Charter (pdf) that was released yesterday. The charter has also set its sights on helping create five unicorns (a privately-held startup valued at over USD 1 bn) by 2031.

But the charter is more than a list of goals, with the document introducing a c. USD 1 bn financing initiative to help centralize and scale startup funding that consolidates various state-led funding channels into a single window. Also part of the state’s transition from being a mostly passive cheerleader to an active market maker is its new focus on growth-stage companies through a new program aimed at scaling up startups.

** Want the full rundown? We will be diving deep into the report to find out what’s new and what’s important in tomorrow’s edition of EnterpriseAM. Stay tuned.

The IMF’s Executive Board is scheduled to meet at the end of the month to hopefully greenlight the combined fifth and sixth reviews of the country’s USD 8 bn extended fund facility program (EFF), Managing Director Kristalina Georgieva told Sky News Arabia.

Provided the board gives the final sign-off, the Fund will release USD 2.3 bn to Egypt — split between USD 2 bn from the EFF and another USD 300 mn from the resilience and sustainability fund — according to Georgieva, who cited the government’s “seriousness” and progress on reforms despite political and economic difficulties.

Poll watch

Headline urban inflation is expected to ease 0.6 percentage points to 11.7% y-o-y in January, driven by a favorable base effect, softer food prices, and a stronger EGP, according to a Reuters poll of 18 analysts. Core inflation is also seen edging down 0.3 percentage points to 11.5%, according to a poll of five analysts by the newswire.

The official numbers expected Tuesday will come just two days ahead of the central bank’s Monetary Policy Committee meeting on Thursday, setting the tone as they decide on whether to push ahead with the easing cycle. With a growing consensus that inflation is now firmly on a downward path, a reading in line with analysts’ expectations will embolden calls for the bank to maintain its easing momentum.

Project update

Draschem’s planned sodium cyanide production plant could double its production capacity and even produce battery components, according to a statement from the General Authority for Investment and Freezones. The project — now estimated at USD 200 mn, up from the USD 180 mn estimate we last heard — will study doubling production capacity and producing other derivatives as part of a second stage, followed by the production of sodium-ion battery components in a third phase.

Why it matters: The move to produce sodium-ion batteries could have a big knock-on effect for our renewables ambitions, helping us move away from the more expensive lithium batteries that currently dominate battery energy storage systems globally. Sodium-ion batteries are an emerging technology that is not only cheaper, but also requires only salt as the main material input, instead of relying on the very limited — and imported — lithium supply that’s in the ground.

Largest ever

The country’s four mobile operators inked a USD 3.5 bn agreement yesterday to secure a total of 410 MHz of new frequency spectrum from the government. The pact — billed as the largest in Egypt’s telecom sector — will double the total frequency capacity made available to operators over the last 30 years.

The move builds on the government’s issuance of 5G licenses in 2024, whose rollout officially began in June 2025.

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Data point

EUR 1.3 bn — that’s how much the European Bank of Reconstruction and Development invested in Egypt in 2025, making the country the largest investment target in the SEMED region, according to a statement from the lender. The deployment of funds shows a disciplined focus on the private sector, which received about 70% of the funding.

Why it matters: The bank is putting its weight behind two specific structural shifts — the energy transition and digital infrastructure. Some 60% of the Egypt pot was funneled through green finance instruments — including EUR 200 mn to make the national grid renewables-ready under the NWFE initiative. A EUR 68 mn syndicated loan for Orange Egypt’s 5G license also highlights that high-speed connectivity is among development capital priorities.

PSA-

WEATHER- It looks like winter is officially over in Cairo today, with a high of 30°C and a low of 19°C, according to our favorite weather app.

You can say goodbye to your jumpers and jackets too in Alexandria, with a high of 28°C and a low of 16°C.

The big story abroad

Global headlines this morning are focused on the resignation of Washington Post CEO Will Lewis, which came just days after the organization laid off one-third of its staff. Lewis took over in January 2024 and presided over a rather unstable period in the paper’s lifetime, which saw mass layoffs and the resignation of one of its top editors. The paper’s CFO Jeff D’Onofrio will take the lead as publisher and CEO.

MEANWHILE, IN MARKETS- BTC has officially lost all its gains since US President Donald Trump’s inauguration last year, as thin liquidity and price volatility push investors away from the cryptocurrency. The slump is likely to persist “for some time,” research analyst at Kaiko Thomas Probst told Reuters. BTC is now trading at around the USD 69k mark, down 20.7% YTD.

Centralized fund targets friction in government lending programs

The Madbouly government is preparing to bake EGP 250 bn in concessional financing into the upcoming state budget to support manufacturing, tourism, and exports, a senior government source tells EnterpriseAM. While the headline figure is the EGP 250 bn allocation, the real shift is institutional, with the authorities also studying the creation of a dedicated industrial financing fund to house the initiatives.

Why it matters: For companies, the bottleneck hasn’t just been the amount of subsidized credit, but the friction in getting it. By centralizing coordination between the Central Bank of Egypt, the Finance Ministry, and the Industrial Development Authority, the government aims to solve the disbursement deadlock that has plagued previous rounds of funding. If successful, this fund would streamline the 15% (or lower) concessional lending programs that are the lifeblood of working capital for manufacturers and hotel developers.

Manufacturing will take the lion’s share of the package, with funding for the sector expected to jump from EGP 80 bn currently to over EGP 100 bn as the program expands beyond its current priority sectors (pharma, chemicals, automotive, food, and building materials) to include more high-value-added industries.

The EGP 50 bn tourism initiative will remain in place, alongside incentives supporting EV localization, natural gas conversion, clean mobility solutions, and renewable energy projects, we were told. Export subsidies in the new budget are also set to increase amid expectations of stronger demand for Egyptian products and improved access to external markets, the source said.

The final interest rate applied to these initiatives remains under review in light of potential monetary easing, the source noted. Currently, the Finance Ministry subsidizes these initiatives at a 15% rate, well below the CBE’s corridor rate.

Rate cuts spark lending jump, but margins come under pressure -S&P Global

Egyptian bank lending is projected to jump 25% in 2026, S&P Global said in its latest Egyptian Banking Outlook. While loan growth is expected to accelerate, outsized profitability is fading as the Central Bank of Egypt continues its monetary easing cycle. Return on equity (ROE) is expected to normalize at 20% by 2026, down sharply from a peak of 39% in 2024.

Why it matters: The era of “easy money” for banks is drawing to a close. Lenders have bolstered their earnings over the last few interest-rate-high years by parking excess liquidity in high-yield government bonds. With the central bank now cutting rates, that low-effort income stream is shrinking, forcing banks back into the more competitive business of offering private-sector corporate loans to defend their margins.

The breakdown

Growth drivers: S&P expects a recovery in private-sector credit, but government and public-sector borrowing will remain the main engine of loan growth amid persistent funding needs. SMEs are also expected to contribute, even after losing market share over the past two years.

Macro tailwinds: The lending rebound is supported by a strengthening macro backdrop. Real GDP growth is forecast to rise to 4.8% in FY 2025-26, up from 4.4% a year earlier, supported by sustained momentum in tourism. Financing conditions are also expected to ease, with interest rates projected to fall to 18% by June 2026 and average inflation seen slowing to 12.1% this year, down from 20.1% in 2025.

Lower rates should support investment by reducing borrowing and production costs, former Industrial Development Bank Chair Maged Fahmy tells EnterpriseAM. “Encouraging investment naturally means expanding bank loan portfolios,” he said, adding that companies are likely to lean more heavily on debt to finance capex.

Asset quality is expected to remain stable, with non-performing loans holding at around 2% over the next 12–18 months, down from 2.9% in December 2023. A large and growing deposit base will continue to support liquidity and funding, S&P said, citing strong household deposits, which account for roughly 74% of private-sector deposits.

ROE to ease, but capital strength offers a cushion

Profitability to normalize: Returns are set to cool from recent highs, with ROE projected at 20% in 2026, down from an estimated 24% in 2025 and well below the 2024 peak. S&P attributes the decline to narrowing net interest margins as rates fall and funding costs reprice more quickly.

The pressure on profitability should be offset by lower credit losses, with the cost of risk expected to ease to 1.3% this year from 2.5% in 2024, alongside strong capital buffers. The sector’s capital adequacy ratio stood at 18.6% as of June 2025, comfortably above the 12.5% regulatory minimum.

Despite the squeeze, Fahmy argues that a slight dip in profitability is a “natural part of the economic cycle,” given that banks have already amassed significant earnings in recent years by investing in high-yield treasury bills and bonds.

Cairo matures beyond traditional venture capital model

Egypt is no longer reliant on the equity-only venture model that defines much of the African tech landscape. While regional peers continue to navigate a volatile global VC environment, Egypt’s ecosystem in 2025 remained stable, thanks to a robust mid-market of resilient Series A and B companies supported by a top-tier that has moved almost entirely into sophisticated institutional debt, according to emerging market-focused business intelligence firm Briter’s A frica Investment Report 2025.

By the numbers: Egypt secured over USD 595 mn in venture funding last year, ranking third on the continent with a 15% share of total funding in Africa. Leading the pack was South Africa with USD 1.2 bn (32%), followed by Kenya with USD 1.1 bn (29%).

But looking into the numbers, it becomes clear that “Egypt’s funding stack is becoming one of the most complex in Africa,” Briter tells EnterpriseAM. While early-stage startups still rely on traditional equity (accounting for 70% of funding volume), mature players are scaling through debt mechanisms largely absent elsewhere in Africa.

Bonds alone accounted for nearly 30% of total funding volume in 2025, pioneered by institutional-grade players like MNT-Halan and Bokra, we were told. “This points to a ‘twin track’ funding environment, where new startups are launched through equity, while more mature companies increasingly scale using sophisticated debt instruments,” the firm explained.

Why this matters: While others in the region are still very much tied to the shifting sentiments of VCs, Egypt’s shift toward securitized debt shows that some local players have established the consistent cashflow and transparency needed to service institutional debt, opening up much more reliable and mood swing-proof pools of liquidity when needed.

Egypt has a “uniquely thick middle that distinguishes itself from the top heavy-models of its peers” in Africa, Briter tells us. Some 55% of disclosed transactions in the country now fall in the USD 1-20 mn range, which indicates a healthy pipeline of companies that have moved past what the industry refers to as the “valley of death” and are now entering growth phases.

The country also “emerged as the continent’s frontrunner for strategic exits in 2025, accounting for nearly a third of all African acquisition activity,” we were told. The 63 announced M&As in 2025 were also more diversified [than elsewhere in the region], spanning fintech, e-commerce, healthtech, and software.”

But exits weren’t only diverse, they were notably domestic. Briter described to us a “healthy mix” of fintech, software, and real estate companies that buy “local assets, creating a self-sustaining liquidity cycle that relies less on foreign exits.”

2025 — and most likely 2026 too — was marked by “Cairo-based ventures […] scaling across other markets by exporting proprietary technical infrastructure and asset-light software models,” Briter tells us. Last year saw the MaxAB and Wasoko merger create a “unified retail network serving 450k merchants across Egypt, Morocco, Kenya, Rwanda, and Tanzania,” Meanwhile, Money Fellows looked to expand its digital savings model in Morocco, Swvl looked for higher margin enterprise mobility contracts in places like Kuwait, and MNT-Halan looked to expand its financial inclusion model across the region. And in 2026? We expect to see much of the same — if not more.

Are Egyptians ready to embrace tissue donation?

Last night’s talk shows focused on a proposal to establish a national human tissue bank put forward by Senate member Amira Saber.

The Senate is looking to assess the legislative impact of the organ donation law passed in 2010 and to identify the gaps preventing its full implementation, Saber told El Sora’s Lamees El Hadidi (watch, runtime: 02:01). Despite religious edicts that discourage skin donation, Saber clarified that religious institutions were involved in the national dialogue when the law was passed, noting that there are also fatwas that permit the practice.

What does Dar Al Ifta say? El Hadidi shed light on Dar Al Ifta’s opinion regarding skin donation, citing a fatwa that states: There is no shariah-based objection to performing skin transplant and grafting procedures by utilizing skin from a deceased person, provided there is a compelling necessity.

Getting Egyptians on board is the main challenge: El Hekaya’s Amr Adib (watch, runtime:06:01) criticized the lack of serious engagement among Egyptians regarding post-mortem organ donation, asserting that the obstacle is no longer religious or legislative, but rather psychological and cultural.

Egyptian capital and engineering power new combined-cycle power plant in Hungary

CIB backs Elsewedy Electric’s move into Europe with EUR 58 mn loan

CIB issued a EUR 58 mn loan to Elsewedy Electric to finance its work on a major 500-650 MW combined-cycle power plant in Hungary, according to a statement from the lender seen by EnterpriseAM. Elsewedy is executing the EUR 700 mn project in a consortium with two Hungarian firms, Status KPRIA and West Hungária Bau. The project, slated for completion in 2028, is expected to be Hungary’s largest combined cycle power plant in decades and the country’s first hydrogen fuel-ready plant.

Why this matters: This project upends the traditional Egyptian infrastructure narrative. Instead of foreign contractors bringing international financing to Egypt, we are seeing Egyptian engineering and Egyptian capital being exported to the EU. For Elsewedy, it is a significant move up the value chain into a high-spec European market, while for CIB, it’s a demonstration of its ability to support its clients’ global expansion.

Exxon Mobil and Qatar Energy exit North Marakia block

US oil giant ExxonMobil and QatarEnergy relinquished their 100% interest in the Mediterranean’s North Marakia offshore concession back to the Egyptian Natural Gas Holding Company (Egas), industry publication Mees reported on Friday. Despite a preliminary discovery of some 3.5 tcf of gas at the Nereftari field last year, the find sits below Exxon’s internal commercial threshold for a standalone project.

Why it matters: Although Exxon reportedly wanted to hold the acreage for future development, Egas reclaimed it to force immediate development. UK giants BP and Shell are reportedly circling the block as both have significant, under-utilized infrastructure and spare capacity in the neighbouring West Nile Delta and West Delta Deep Marine (WDDM) concessions.

While ExxonMobil and QatarEnergy are taking a step back, Shell is already ramping up local gas production, targeting 800 mmcf/d by June 2030, double its current 400 mmcf/d, Mees reported separately.

FRA greenlights first futures brokers ahead of EGX launch

The Financial Regulatory Authority (FRA) approved new futures licenses for Arab African International Securities and Al Ahly Pharos, clearing the way for intermediaries ahead of the planned launch of derivatives trading on the EGX, the authority said in a statement last week. .

The approvals come as EGX prepares for a phased rollout starting in March, beginning with futures contracts on the benchmark EGX30 index, before eventually expanding to the EGX70, single-stock futures, and options.

Why this matters: These are the first intermediaries — out of seven applied for the license so far — to get the green light since the EGX itself was licensed to operate the exchange last month. EGX Chairman Islam Azzam has recently told us that derivatives and short selling are key to boosting liquidity, noting that index derivatives in some markets trade at multiples of spot volumes, with a near-term rollout targeted as part of a broader market modernisation drive.

Data centers took the FDI crown last year

As expected, 2025 was the year of the data center, as a digital infrastructure push led the communications sector to topple renewables as the segment seeing the most greenfield FDI globally, according to FDI Intelligence. Total FDI inflows came in at USD 1.3 tn, the fifth-highest figure on record.

Data centers did the heavy lifting for the communications sector, bringing in a record USD 319.7 bn — jumping from USD 184 bn the year before — and accounting for nearly 50% of the 129 megaprojects of the year.

AI’s pull didn’t stop there — its infrastructure lifted FDI levels across other sectors. Investments in semiconductors came in at a record USD 138 bn last year.

The renewables sector was the second-largest FDI recipient, despite inflows falling 26% y-o-y to USD 193 bn. Green hydrogen, clean tech, and wind all saw commitment dips, while solar power remained a bright spot, bringing in USD 75 bn — albeit still less than the previous two years.

Elsewhere, real estate attracted a decade-high USD 102.8 bn, up from USD 96 bn the year before. Projects in aluminum and steel buoyed the metals sector’s USD 62 bn allocation, LNG boosted fossil fuels’ contribution of USD 54 bn, and chemicals made a comeback with USD 33 bn. Automotive manufacturing and electronic components both saw their inflows drop.

Investors are retreating from speculative, long-horizon green hydrogen projects as regulatory hurdles and uncertain revenue models stalled development — and as the focus shifts toward the physical infrastructure underpinning the global AI race. Investors are now prioritizing immediate AI computing capacity assets over future energy technologies.

This might not last long, though. Soaring data center demand is set to increase electricity consumption, turning these facilities into major bottlenecks for aging grids. The next wave of FDI is expected to give special attention to renewable projects designed exclusively to power AI campuses, rather than general grids.

EGX30	49,739	+0.2% (YTD: +18.9%)
USD (CBE)	Buy 46.89	Sell 47.03
USD (CIB)	Buy 46.91	Sell 47.01
Interest rates (CBE)	20.00% deposit	21.00% lending
Tadawul	11,189	-1.4% (YTD: +6.7%)
ADX	10,563	+0.2% (YTD: +5.7%)
DFM	6,691	+0.2% (YTD: +10.7%)
S&P 500	6,932	+2.0% (YTD: +1.3%)
FTSE 100	10,370	+0.6% (YTD: +4.4%)
Euro Stoxx 50	5,998	+1.2% (YTD: +3.6%)
Brent crude	USD 68.05	+0.7%
Natural gas (Nymex)	USD 3.42	-2.5%
Gold	USD 4,979.80	+1.9%
BTC	USD 69,463	-1.3% (YTD: -20.7%)
S&P Egypt Sovereign Bond Index	1,017	+0.1% (YTD: +2.4%)
S&P MENA Bond & Sukuk	151.93	0.0% (YTD: 0.0%)
VIX (Volatility Index)	17.76	-18.4% (YTD: +18.8%)

THE CLOSING BELL-

The EGX30 rose 0.2% at yesterday’s close on turnover of EGP 7.9 bn (37.6% above the 90-day average). Regional investors were the sole net sellers. The index is up 18.9% YTD.

In the green: Ibnsina Pharma (+8.1%), Rameda (+4.8%), and Fawry (+2.2%).

In the red: Raya Holding (-5.3%), Beltone Holding (-3.7%), and TMG Holding (-2.4%).

CALENDAR

2026

FEBRUARY

10 February (Tuesday): Capmas expected to release inflation data for January.

10-12 February (Tuesday-Thursday): Gitex Global’s AI Everything Middle East & Africa Summit.

12 February (Thursday): Monetary Policy Committee’s first meeting of 2026.

19 February (Thursday): First day of Ramadan (TBC).

MARCH

15 March (Sunday): IMF to hold its seventh review of Egypt’s USD 8 bn EFF arrangement.

21 March: (Saturday): Eid El Fitr starts (TBC).

30 March – 1 April (Monday-Wednesday): Egypt International Energy Conference and Exhibition 2026 (EGYPES).

APRIL

2 April (Thursday): Monetary Policy Committee’s second meeting of 2026.

12 April (Sunday): Coptic Easter.

25 April (Saturday): Sinai Liberation Day.

MAY

1 May (Friday): Labor Day.

21 May (Thursday): Monetary Policy Committee’s third meeting of 2026.

27-29 May (Wednesday-Friday): Eid El Adha (TBC).

JUNE:

30 June (Tuesday): National holiday in observance of the June 30 Revolution (TBC).

JULY

9 July (Thursday): Monetary Policy Committee’s fourth meeting of 2026.

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

AUGUST

20 August (Thursday): Monetary Policy Committee’s fifth meeting of 2026.

26 August (Wednesday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

SEPTEMBER

15 September (Tuesday): IMF to hold its eighth review of Egypt’s USD 8 bn EFF arrangement.

24 September (Thursday): Monetary Policy Committee’s sixth meeting of 2026.

27-29 September (Sunday-Tuesday): Global Conference on Population, Health and Human Development.

OCTOBER

6 October (Tuesday): Armed Forces Day.

29 October (Thursday): Monetary Policy Committee’s seventh meeting of 2026.

DECEMBER

17 December (Thursday): Monetary Policy Committee’s eighth meeting of 2026.

EVENTS WITH NO SET DATE

Early 2026: Passenger operations on the New Administrative Capital–Nasr City monorail scheduled to begin.

Early 2026: The government will launch the second package of tax breaks.

1Q 2026: Trial operations for the Ain Sokhna–Sixth of October section of Egypt’s first high-speed rail line scheduled to begin.

1Q 2026: Turkish President Tayyip Erdogan to visit Egypt.

May 2026: End of extension for developers on 15% interest rates for land installment payments.

2H 2026: Operations at Deli Glass Co’s new USD 70 mn glassware factory kick off.

2027

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

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings.

2027: Egypt-EU Summit 2027.

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

September 2028: First unit of the Dabaa nuclear power plant begins operations.

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