Language
العربية

Sections

About

Privacy & Support

Get EnterpriseAM daily

Available in your choice of English or Arabic

Tuesday, 5 Nov 2024

What We're Tracking Today
M&a Watch
Transport
Diplomacy
A Message From Visa
Moves
Also On Our Radar
Planet Finance
Going Green
Calendar

FinMin lays out plan for ensuring economic stability

An independent publication supported by

Opening up a world of opportunity

Realize More

Live More

Powering with nature

Driving growth

Today at a glance

1

M&A WATCH

SIC submits mandatory tender offer to own up to 100% of CIRA Education.
2

Transport

Railway authority to launch tender for Tanta-Damietta line development next year.
3

What We're Tracking Today

Cyprus is prepared to export natural gas to Europe via Egypt.
4

Diplomacy

El Sisi meets with regional leaders on the sidelines of WUF.
5

Also on our Radar

Kouchouk lays out plan for ensuring economic stability.
6

Also on our Radar

State wants to add 1k schools nationwide.
7

What We're Tracking Today

It’s day two of the World Urban Forum.
8

PLANET FINANCE

Election jitters and Fed rate decision set to shake Wall Street this week.
9

Going Green

How will Egypt fare in the global green hydrogen race by 2030?

Tuesday, 5 Nov 2024

What We're Tracking Today
M&a Watch
Transport
Diplomacy
A Message From Visa
Moves
Also On Our Radar
Planet Finance
Going Green
Calendar
1

What We're Tracking Today

Cyprus is prepared to export natural gas to Europe via Egypt

Good morning, folks. The news flow has calmed down a bit after a pretty busy start to the week.

WATCH THIS SPACE-

#1- Cyprus is prepared to export natural gas to Europe via Egypt: Cyprus’ Energy Minister Giorgos Papanastasiou said yesterday that his country is prepared to supply natural gas to Egypt to re-export to European markets, adding that there are discussions around supplying Egypt’s local market as well, Reuters reports.

Remember: Back in September we heard that French energy company TotalEnergies wanted to supply gas from its fields in Cyprus to Egypt for liquefaction and re-export as LNG or to be fed directly into the grid. This followed news that Egypt and Cyprus were considering establishing an energy corridor that would see Cyprus send natural gas to Egypt to be liquified and exported to global markets.

#2- Oil Ministry to unveil full incentives policy framework during the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2024) which is being held in the UAE until Thursday, Oil Minister Karim Badawi said yesterday. The framework will aim to promote investments in the oil, gas, refining, and petrochemicals sectors. Badawi also revealed that his ministry is preparing to launch a tender for mineral exploration in several areas of the Western Desert soon.

HAPPENING TODAY-

It’s day two of the World Urban Forum: The UN’s World Urban Forum kicked off yesterday and will run until Friday in Cairo, bringing together a global array of policymakers, urban planners, academics, business leaders, and community representatives to address today’s critical urban challenges. Co-organized by the Egyptian government, the forum will feature discussions and workshops aimed at reshaping urban policies and fostering sustainable, inclusive cities for the future. Check out the agenda via the link available on the event’s official website.

IN THE HOUSE-

#1- MPs to vote on new Criminal Procedures Law draft: MPs today will preliminarily vote on a bill amending the Criminal Procedures Law, which if passed would introduce changes to pretrial detention periods and regulations on financial compensation for wrongful detention.

What’s next? If approved in principle, MPs will proceed to a detailed review of each article in upcoming sessions over the coming weeks.

#2- Kouchouk will address MPs on fiscal policy: Finance Minister Ahmed Kouchouk is expected to deliver his first statement before the House today, with the FinMin expected to outline Egypt's current fiscal policies and economic challenges

#3- Tax dispute settlement deadline to be extended: The House is also set to vote on an amendment to extend the tax dispute settlement deadline to 30 June 2025. The amendment, drafted by the government, received approval from the House Budget Committee and the Senate last week.

DURING YESTERDAY’S MEETING, MPs gave final approval to a bill allocating Egyptian-Dutch JV Egyptian-Dutch Shipping Company (EDSCO) a 30-year concession to develop a 35k sqm dry bulk logistics zone at Alexandria Port. EDSCO — a partnership between Netherlands-based Vitra and Egypt’s El Fateh — will manage and maintain the logistics zone, which is designed for dry bulk cargo with an annual capacity of 5 mn tons.

PSA-

WEATHER- It’s another cool day in Cairo, with a high of 25°C and a low of 17°C, according to our favorite weather app.

It’s as cold in Alexandria, with a high of 25°C and a low of 20°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.

CIRCLE YOUR CALENDAR-

Austrian trade mission incoming: A delegation of representatives from more than 15 Austrian companies will visit Cairo in March 2025 to explore cooperation in the industrial sector. It will be followed by another delegation focused on the transport sector by the end of next year, Austrian Commercial Counsellor Georg Krenn told Al Borsa. Austria is also working to prepare an MoU to be signed with the Madbouly government focused on renewable energy and green hydrogen, Krenn said, adding that several Austrian companies have expressed interest in investing in the sector, as the incentives and tax breaks draw them in.

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

CLARIFICATION- The government raised natural gas prices for households in September and has not implemented any new increases this month, the Oil Ministry said in a statement yesterday. The statement came in response to local reports we picked up yesterday about new price hikes starting this month. The ministry had not previously issued official statements regarding the price increases it said it decided on in September.

THE BIG STORY ABROAD-

It’s election day in the US of A, which means very few other stories will top headlines in the international press. Donald Trump and Kamala Harris were both in Pennsylvania overnight, where each candidate pushed final messaging in a bid to secure what is widely seen as one of the most critical swing states in the election. Meanwhile, both candidates’ campaigns continued to work on boosting voter turnout in the last stretch before today’s vote, with each taking different approaches, the New York Times notes. The Financial Times, the Wall Street Journal, Reuters, and Bloomberg also have coverage of the final campaigning push.

Speaking of (unorthodox) methods of boosting turnout: Elon Musk’s USD 1 mn daily voter giveaway — designed to encourage voter turnout — is being allowed to proceed after a Pennsylvania judge ruled that the contest was not designed as an “illegal lottery.” Reuters, Bloomberg, and Axios have more.

What we can expect: Politico has rundowns of each of Harris’ and Trump’s paths to securing the vote, while the Financial Times looks at what each outcome would mean for Trump.

REMEMBER: The Electoral College, not the popular vote, ultimately decides who becomes president. Each state is allocated electors equal to its congressional representation (senators plus representatives). Voters in each state choose electors, pledged to presidential candidates. Taking the popular vote in a state usually means a candidate gets all its electoral votes (except in Maine and Nebraska). A candidate needs 270 of 538 electoral votes to take the presidency. Bloomberg also goes deeper.

BELOW THE FOLD- Israel killed another 16 Palestinians in Gaza’s Beit Lahiya and Zawayda in airstrikes yesterday. Meanwhile, Tel Aviv has also limited aid trucks’ entry into Gaza even further, bringing the daily average to 30 — equivalent to “only 6% of the commercial and humanitarian supplies that used to enter Gaza before the war,” according to UNRWA head Philippe Lazzarini. Reuters has the story.

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

In today’s issue: We look at how Egypt will fare in the global green hydrogen race by 2030.

Tags:

Discover the essence of paradise at Somabay: Join us at the World Travel Market in London, Stand #S12-200 from November 5-7, 2024.

Let’s connect and explore the experiences that make Somabay a world class destination. From pristine beaches to exhilarating sports, we can’t wait to share the beauty of Somabay with you.

2

M&A WATCH

SIC submits mandatory tender offer to own up to 100% of CIRA Education

Social Impact Capital submits offer to own up to 100% of CIRA: CIRA Education majority shareholder Social Impact Capital (SIC) has submitted a mandatory tender offer to acquire up to an additional 48.78% of CIRA, according to a statement (pdf) from the Financial Regulatory Authority. SIC currently holds a 51.2% stake in the country’s leading private education company. The offer is currently being reviewed by the FRA.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The details: SIC has offered to purchase some 284.3 mn of CIRA’s shares at EGP 15 a piece — EGP 1 higher than previously expected — putting the transaction’s value at EGP 4.26 bn by our math. CIRA Education will also be required to submit a mandatory tender offer for shares in its EGX-listed subsidiary Cairo for Educational Services (CAED) if the acquisition changes CAED’s ownership structure

What’s next for CIRA? If the mandatory tender offer is successful, SIC plans to delist CIRA Education from the EGX, with the founding El Kalla family expected to remain invested in the company and our friend Mohamed El Kalla expected to stay on as CEO to lead the company’s regional growth.

The news follows an FRA extension of the MTO deadline: The FRA in August granted SIC a 60-working-day extension on its mandatory tender offer effective 11 August — meaning that SIC managed to get the offer in right before the deadline.

All part of the PIF’s plan to take over CIRA: The Saudi Egyptian Investment Company — a wholly-owned subsidiary of the Public Investment Fund — said in May that it would buy into SIC. SIC used the cash injection to launch its mandatory tender offer for the rest of CIRA’s shares.

We’ve seen this movie before: PIF has a proven track record of turning national players into regional champions, with the global growth of born-in-Egypt driller Ades Holding being a case in point. Since acquiring Ades and taking it private, PIF has helped Ades land contracts in Saudi Arabia and new markets, refine its strategy, and go public again on KSA’s Tadawul.

Tags:

This publication is proudly sponsored by

3

Transport

Railway authority to launch tender for Tanta-Damietta line development next year

ENR to launch tender for railway line upgrades early 2025: The Egyptian National Railways is planning to launch a tender for the development of the Tanta-Mansoura-Damietta railway line next January, Al Borsa reports, citing informed sources. Project consultants Shaker Group and the multinational Systra will complete the tender documents by the end of this month, according to the sources.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Five consortiums in the running: Five local and international consortiums have qualified to participate in the tender they are: Alstom - El Rowad, Thales -Orascom, China’s CRSC, Siemens- Madkour Group, and South Korea’s LS Electric - Korea National Railway, the sources said. The consortiums will submit their technical and financial bids between early January and February, with evaluation set to kick off in March.

What upgrades? The upgrades involve double-tracking a 65-km stretch of the 118 km line and installing an automated signaling system. The upgrades are set to improve reliability and safety for passengers, increase the capacity to transport goods to and from the port of Damietta, and reduce carbon emissions

Who will do what? The local company will work on infrastructure, while the foreign partner will handle everything else, from signaling systems to communication systems.

Refresher: The European Investment Bank (EIB) and the French Development Agency (AFD) have signed agreements with the Egyptian government in late 2022 to fund the project. The EIB is extending an EUR 221 mn loan, while the AFD will lend EUR 95 mn to the project.

Tags:
4

Diplomacy

El Sisi meets with regional leaders on the sidelines of WUF

A busy day for diplomacy: President Abdel Fattah El Sisi held meetings with several Arab leaders on the sidelines of the UN’s World Urban Forum (WUF) yesterday, where he touched on many pressing regional issues. El Sisi met with:

#1- Palestinian President Mahmoud Abbas, in a meeting that touched on the latest developments in Gaza and saw El Sisi reaffirmed Egypt’s solidarity with the Palestinian people and their cause, and reiterated the government’s stance against the Israeli escalations against civilians in Gaza and the West Bank, according to an Ittihadiya statement. El Sisi also assured Abbas that Egypt will keep pushing for a ceasefire and the resumption of the entry humanitarian aid into Gaza.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

#2- Sudan’s de facto ruler General Abdel Fattah Al Burhan, where El Sisi emphasized that Egypt stands in support of the Sudanese people.

#3- Yemeni Presidential Leadership Council Chairman Rashad Al Alimi, where they discussed the developments in the Gulf of Eden and Red Sea and the need to reach a comprehensive political solution in Yemen.

AND- Egypt, Iran in de-escalation talks: Egyptian Foreign Minister Badr Abdelatty discussed regional tensions with his Iranian counterpart Abbas Araghchi in a phone call, according to a statement from the Foreign Ministry. Abdelatty highlighted Egypt’s concerns about the possibility of a full-scale regional war amid rising tensions.

Tags:
5

A MESSAGE FROM VISA

The power of data and generative AI and the importance of responsible data usage for financial institutions

Last week, Visa held its first ever Data and AI Summit in Egypt, a groundbreaking event that brought together thought leaders and partners for an in-depth exploration of data and artificial intelligence. This initiative underscores Visa's commitment to driving innovation and supporting its partners to unlock the potential of data and AI in financial services and digital commerce. Attendees had the unique opportunity to engage with industry experts, share insights, and explore cutting-edge technologies in topics such as machine learning, alternative credit scoring, MLOps, and modern data platforms. The Summit also included a data science bootcamp aimed at empowering practitioners with the knowledge and tools necessary to harness the power of data and AI.

Given the central role that data plays in helping businesses achieve operational efficiency, maximize client personalization, and enhance products and services development and delivery, it is paramount to set a new benchmark for ethical data practices and reinforce the importance of trust in the digital ecosystem. However, rising data breaches are shaking consumer confidence. To kick off a new era of confidence, companies must prioritize ethical data collection, ensuring consumers feel safe sharing their information. Visa is leading the charge, aiming to restore trust in digital commerce.

Visa’s study unveils a striking 52% of consumers believe companies prioritize legal interests over genuine data protection, fueling mistrust. This concern is echoed in the Middle East and Africa, where 53% of UAE consumers, along with 45% of Nigerians, South Africans,, and 44% of Saudis feel similarly.

So, what drives data sharing decisions? Clarity on data usage (64%), easy permission changes (59%), and worries about requested data types (58%) are crucial. Only 42% value payment for data, underscoring a pressing need for transparency.

Find out more here.

Tags:
6

Moves

Memphis Pharma taps Tarek Mahrous as interim CEO

Memphis Pharma has a new CEO: The drug manufacturer appointed board member Tarek Mahrous Salman as acting CEO after its board approved the resignation of Bassem Abdallah (LinkedIn), according to an EGX disclosure (pdf).

Tags:

7

Also on our Radar

Egypt’s Kouchouk lays out plan for ensuring economic stability

POLICY-

Finance Minister Ahmed Kouchouk laid out three near-term priorities to ensure economic stability and stimulate private sector growth in a video conference organized by EFG Hermes and attended by over 60 foreign institutional investors, according to a Finance Ministry statement. Kouchouk pointed specifically to strengthening trust between the Tax Authority and the business community, leveraging diverse fiscal policy tools to expand the private sector's role in driving economic activity, and implementing a targeted strategy to reduce the debt-to-GDP ratio.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

DATA POINT- Egypt’s debt-to-GDP ratio dropped to 89.6% in June 2024, down from 96% in June 2023, while the primary surplus reached EGP 90 bn in 1Q FY 2024-25, Kouchouk said during the meeting.

EDUCATION-

A plan to add 1k schools nationwide: The General Authority for Investment (GAFI) and Educational Buildings Authority aim to attract investments to establish 1k schools by offering fresh facilities, according to a statement. Educational projects can now apply for golden licenses and investors can check out the designated land for educational projects through Egypt’s investment map. The Madbouly government has also lowered the required area of schools to 1.2k sqm.

** We ran a Blackboard over the summer about the obstacles facing private investment in the education sector and how the government is working to address them.

LOGISTICS-

#1- Egypt to establish three shipyards: Egypt is set to establish three new shipyards in partnership with the private sector in the Suez and Red Sea governorates, with investments exceeding USD 100 mn, head of the Federation of Egyptian Industries’ maritime transport division Ibrahim El Dessouky told Al Borsa. Each shipyard will cover between 200k and 500k sqm and will cost between USD 30 mn and USD 50 mn, with plans to complete all three during 1H 2027.

We could see even more shipyards soon: Three Gulf-based companies are currently in the early stages of negotiations with the government and private sector companies about establishing more shipyards, El Dessouky told the outlet, adding that Egypt has the potential to become a regional center for shipbuilding and repair in the future.

#2- Fincart wants to ship internationally: Local shipping services provider Fincart plans to add international shipping to its local services by the end of the year, co-founder and CEO Mostafa Masry told Al Borsa. The startup also plans to expand its shipping service to the Gulf in the near-term, with plans to expand all of its offerings to Gulf countries after that. Once Fincart has successfully established itself in the Gulf, Masry said that the company will move into north and west African markets, penciling in this broader expansion for 2025. Fincart is also looking to expand its number of shipping partners to 25 in the coming period.

M&A-

Agro New Vision ups stake in Misr Beni Suef Cement: Agro New Vision Distribution has increased its stake in Misr Beni Suef Cement to 12.03% in an EGP 174.9 mn transaction, according to an EGX disclosure (pdf). Agro New Vision initially held 5.9% of the company. Agro appears to have bought some of the National Investment Bank’s in the cement manufacturer, which sold 3.65 mn shares in the company in an EGP 171.6 mn transaction that reduced its stake in the company to 9.99%, according to a disclosure (pdf).

TELECOM-

Introducing the first Saudi subsea cable linking KSA and Egypt: Saudi Arabia’s telecom giant Mobily and Telecom Egypt have signed a cooperation agreement to lay a Mobily-owned submarine cable passing through the Red Sea, connecting Egypt and Saudi Arabia, according to a joint press release (pdf). The new subsea cable will link Sharm El Sheikh and Duba, creating a Gulf-to-Egypt digital corridor and plugging into Egypt’s vast subsea network for enhanced regional connectivity.

STARTUPS-

Introducing Invest IT: Flat6Labs, ITIDA’s Technology Innovation and Entrepreneurship Center (TIEC) have launched a new program — dubbed Invest IT — that aims to support 12 seed and early-stage tech startups by providing them with guidance and connecting them with potential investors, according to a statement. The 6-8 week program will be carried out over two phases, with the first providing participating startups with training and coaching and the second connecting the startups with a network of investors.

Who can apply? ICT-enabled startups that are at the seed or pre-Series A funding stage can apply to participate. Companies need to have a defined product or service and two or more founders, and must have been registered for at least two years from the program’s start date. Interested applicants can apply online.

MANUFACTURING-

Sports Ministry mulls over a freezone for sports gear: The Sports Ministry — in cooperation with the ministries of trade and investment — is reportedly preparing a feasibility study to set up a freezone dedicated to sports equipment and products, Al Borsa writes citing unnamed sources. The freezone — which will be allocated a plot by 2025 — aims to reduce the country’s USD 700 mn sports gear import bill.

We already have interested partners: The ministry has pitched the project to several sports equipment manufacturers and brands, which have expressed interest in setting up manufacturing facilities in the planned freezone, the sources added.

CAPITAL MARKETS-

CI Capital’s CI Sector Fund has lift-off: CI Capital Asset Management received the regulatory greenlight to open the subscription door for its CI Sector Fund, a diversified investment fund, starting 11 November and for a two-month period, the company said in a message seen by EnterpriseAM. The fund will invest in real estate and construction, technology and communications, export sectors, consumer sectors, and digital payments.

AVIATION-

Alamein, Sohag airports just became internationally licensed: The Alamein International Airport and Sohag International Airport secured international licenses from the Egyptian Civil Aviation Authority — making them recognized as international airports for the first time since their inauguration, according to a statement. The license ensures that the airports meet the standards required by the UN’s International Civil Aviation Organization.

TECH-

Dell and Hassan Allam to enhance technological efficiency: Dell Technologies and Hassan Allam Holding signed an MoU to enhance technological capabilities in Egypt, according to a statement(pdf). The agreement will see Dell provide services in the servers and storage areas, with potential to extend collaboration to include client, backup, and recovery services.

DEBT-

Social Housing Fund taps 11 banks for a EGP 50 bn loan: The Housing Ministry’s Social Housing and Mortgage Finance Fund has secured a EGP 50 bn syndicated loan from a mix of state-owned and private banks, to finance mid- and low-income housing projects, according to a statement (pdf).

The lenders include Banque Misr. the National Bank of Egypt, Banque du Caire, Housing and Development Bank, CIB, QNB Alahli, Arab African International Bank, Bank NXT, Midbank, Industrial Development Bank, and United Bank.

Tags:
8

PLANET FINANCE

Election jitters and Fed rate decision set to shake Wall Street this week

Traders gear up for an all-nighter as US elections loom: Wall Street is bracing for a long, volatile night as traders prepare for the results of the US presidential election today, with trading desks in Hong Kong and Singapore ready to support overnight activities. As one portfolio manager put it, “5 November is going to be a blindfolded mud-wrestle in a minefield,” pointing out the uncertainty revolving around the elections this time around.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Everybody is preparing for the big night: Major banks like JPMorgan and Goldman Sachs are staffing up to ensure their trading desks are ready to handle high volumes and volatility throughout the election night. “We will stay as long as we need — if that’s 2 am, it’s 2 am. If we have to sleep over, we will,” said Glen Capelo of Mischler Financial Group.

Focus on bonds and currencies: The ICE BofA Move index — a key measure of expected volatility in the US bond market — surged by 40% last month, while the CME index of implied volatility across major currencies hit its highest level since early 2023.

What happens if who wins? Traders have been putting their money on former president Donald Trump winning for weeks, pushing up stocks, currencies, and crypto, all while bond yields were on the rise. After a poll showed that the Democratic Party’s Kamala Harris has a lead over Trump in Iowa, the Bloomberg USD Index dropped to its lowest since August, yields on 10-year Treasuries fell, and BTC slipped. Traders are eyeing the return of popular “Trump trades” — going long on the USD and short on bonds — with plans to either capitalize on or swiftly unwind these positions, depending on how the results go. But if Harris pulls the rug from under Trump’s feet, Trump trades could reverse, leaving behind dramatic swings in the market overnight.

Lessons from the past: Traders are revisiting the 2016 elections, when markets initially misread the results of the polls, pushing US futures to swing widely. This time, hedge funds are scaling back risks and preparing for any unexpected moves. “Equity markets collapsed after Trump was elected [in 2016], but that lasted a day, then they rallied,” noted Ed Al Hussainy of Columbia Threadneedle Investments. Traders are adopting a neutral stance to shore up their liquidity. “We’ve spent a lot of time cleaning up our inventory and our own positions in order to be as neutral as possible to approach the event from the perspective of providing that intermediation,” Citi’s Vikram Prasad said.

It's not just the Oval Office that matters, as market reactions also hinge on Congressional outcomes. A Republican sweep could trigger inflation and higher bond yields, as Trump’s plans to cut tax and import tariffs could very much reverse the course on inflation and increase US national debt, while a divided Congress may limit policy shifts, offering some balance.

Ongoing market volatility could extend beyond today, as Wall Street braces for potentially delayed or contested election results. Such scenarios could lead to a prolonged market uncertainty, making it difficult for traders to navigate. There’s also the Federal Reserve’s upcoming rate decision on Thursday, where a second consecutive rate cut is widely expected, with one survey showing that 98% of traders are banking on a 25 bps cut by the end of this week. The Fed’s decision will play a key role in shaping post-election market dynamics, as traders balance election outcomes with potential shifts in monetary policy.

Market reax: It was a sea of red across US markets with the Dow Jones ending the first trading day of the week down 0.6%, the S&P 500 dipping 0.3%, and the Nasdaq falling 0.3%.

The story is all over international press: Bloomberg | FT | CNBC.

MARKETS THIS MORNING-

Asian markets are mixed at dispatch time as investors sit awaiting the results of the US presidential election and the Federal Reserve’s decision when it meets later this week. Japan’s Nikkei is up 1.3% and South Korea’s Kospi is down 0.5%.

EGX30

30,650

-0.6% (YTD: +23.1%)

USD (CBE)

Buy 49.02

Sell 49.16

USD (CIB)

Buy 49.03

Sell 49.13

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,039

-0.1% (YTD: +0.6%)

ADX

9,331

-0.2% (YTD: -2.6%)

DFM

4,585

-0.8% (YTD: +12.9%)

S&P 500

5,713

-0.3% (YTD: +19.8%)

FTSE 100

8,184

+0.1% (YTD: +5.8%)

Euro Stoxx 50

4,852

-0.5% (YTD: +7.3%)

Brent crude

USD 75.12

+2.8%

Natural gas (Nymex)

USD 2.78

+4.4%

Gold

USD 2,746

-0.1%

BTC

USD 68,072

-1.2% (YTD: +60.7%)

THE CLOSING BELL-

The EGX30 fell 0.6% at yesterday’s close on turnover of EGP 4.0 bn (5.9% below the 90-day average). Local investors were the sole net sellers. The index is up 23.1% YTD.

In the green: Juhayna (+2.9%), Madinet Masr (+1.5%), and Ezz Steel (+0.8%).

In the red: B Investments (-2.1%), Cleopatra Hospitals (-2.0%), and Beltone Holding (-1.3%).

Tags:

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

Published every Tuesday in EnterpriseAM.

Read going Green
9

Going Green

How will Egypt fare in the global green hydrogen race by 2030?

Pulse-check on our green hydrogen ambitions: Egypt is poised to emerge as a relatively cost-competitive producer in the global green hydrogen and green ammonia markets by 2030 as the costs of electrolyzer systems and tariff prices for renewable energy generation fall, according to a report(pdf) by India-based management consulting firm Alvarez and Marshal that evaluates the competitiveness of 10 high-potential countries. However, higher financing costs put Egypt at a relative disadvantage.

Where will Egypt stand? Across the countries examined in the report, Egypt is expected to produce the seventh cheapest green hydrogen and green ammonia in 2030. The production cost of green hydrogen is expected to drop to USD 2.7 per kg, down from USD 4.5 per kg last year, while that of ammonia is forecasted at USD 635 per ton, down from USD 962 per ton last year.

The competition? The UAE is projected to produce the cheapest green hydrogen and green ammonia of the lot in 2030 — at USD 1.7 per kg and USD 436 per ton, respectively. India is expected to come second — producing green hydrogen at USD 1.8 per kg and green ammonia at USD 467 per ton — and Saudi Arabia third (USD 1.8 per kg and USD 475 per ton). The top three contenders are followed by Chile, the US, and Australia.

ICYMI- The government in August launched the National Low-Carbon Hydrogen Strategy, which targets 5-8% of the global hydrogen market by 2040. The strategy outlines two scenarios: a “central” scenario which sees the country producing 1.5 mn tons per annum of green hydrogen by 2030 with 1.4 mn tons pegged for export and a more ambitious, “green” scenario that sees the country producing 3.2 mn metric tons of green hydrogen annually by 2030, with 2.8 mn metric tons marked for export.

THE FACTORS SHAPING THE COMPETITION-

The prices of renewables are expected to dip: Solar tariffs in Egypt, the UAE, Saudi Arabia, Chile and India are expected to fall below USD 20 per MWh by 2030, while wind tariffs are expected to reach under USD 30 per MWh in Egypt, Saudi Arabia, the US, and India by then.

As are those of electrolyzers: The costs for alkaline electrolyzers are expected to drop to USD 310–440 per kW across the countries examined in 2030, down from around USD 735–945 per kW in 2023.

However, the cost of capital is the primary sticking point for Egypt: Despite Egypt’s high solar and wind resource capabilities, its higher financing costs — which come on the back of higher country risk — put it at a disadvantage compared to its peers. Financing costs significantly impact the final price because green hydrogen production is a capital-intensive process, with 70-90% of costs stemming from renewable energy and electrolyzer capital expenditure. Elevated costs are one of the key challenges facing the expansion of green hydrogen production in Egypt, Ahmed Hegazy, head of the Egypt Green Energy Association, told EnterpriseAM.

And there’s a handful of other stumbling blocks along the road: Egypt also ranks second to last — right behind Argentina — in terms of how conducive its overall energy ecosystem is to green hydrogen production. It received a score of “medium” across a handful of parameters, including the size of its power grid, its current hydrogen usage, and port infrastructure. It scored “low” on its renewable energy ecosystem, manufacturing ecosystem, petrochemicals and gas consumption, ease of doing business, and trade relationships with the EU and Japan.

All in all, Egypt is well-positioned to compete in the green hydrogen market: Egypt’s significant experience in gray and green hydrogen production and ammonia production is an optimal starting point to establish a thriving low-carbon hydrogen economy. The country also has substantial renewable energy capacity, a strategic geographic location in terms of proximity to Europe, well-developed port infrastructure, and access to global maritime traffic through the Suez Canal.

One thing going for us is a whole lot of green hydrogen projects in the pipeline: Since 2021, Egypt has signed around 32 MoUs for green hydrogen production, 15 of which have been converted into binding contracts with the Egyptian government. Two additional agreements were signed on the sidelines of the European Investment Forum in Egypt, bringing the total to 17 binding agreements with an investment volume of USD 83 bn and a production capacity of 3 mn tons of green hydrogen.

Your top green economy stories for the week:

Tags:

CALENDAR

2024

NOVEMBER

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

8-9 November (Friday-Saturday): Carerha Summit 2024, Cairo, Egypt.

10-12 November (Sunday-Tuesday): Falak Startups’ Fund Manager Masterclass, Cairo, Egypt.

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

17-19 November (Sunday-Tuesday): Autotech Exhibition for Automotive Aftermarket & Feeder Industries, Cairo, Egypt.

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

25-27 November (Monday-Wednesday): Annual Digital Nation Conference, Cairo, Egypt.

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

28-30 November (Thursday-Wednesday): Cairo International Wood and Wood Machinery Show, Cairo, Egypt

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

DECEMBER

16-17 December (Monday-Tuesday): Mining World Conference 2024, London, UK.

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.

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

28 January (Tuesday): Nigeria to inaugurate the USD 5 bn Africa Energy Bank in Abuja.

7-10 April 2025 (Monday-Thursday) : EFG Hermes One on One conference, Dubai, UAE.

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

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

March 2025: Operation of phase one of the Amotope wind farm

EVENTS WITH NO SET DATE

2025: The InterAcademy Partnership assembly.

2025: Nile Basin States Summit, Cairo, Egypt.

2Q 2025: Safaga Terminal 2 to start operations.

Mid-2025: The Administrative Capital for Urban Developments to roll out the second phase of offering industrial plots to investors.

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.

Now Playing
Now Playing
00:00
00:00