Get EnterpriseAM daily

Available in your choice of English or Arabic

Here’s who’s eligible to bid in the government’s upcoming PPP desalination program

1

What We're Tracking Today

Egypt’s net foreign liabilities hit fresh record high in March

Good morning, friends, and welcome to a very busy news day, with news on everything from privatization and infrastructure investment to the FX crunch and the ongoing competition to see who will take control of paintmaker Pachin.

HAPPENING TODAY-

#1- It’s deadline day for Pachin shareholders: Shareholders in EGX-listed paints company Pachin have until the end of today’s trading session to decide whether to sell their shares to National Paints Holding (NPH) or Eagle Chemicals.

The offers: In an ongoing mandatory tender offer, Dubai-based NPH is offering EGP 39.80 per share and Eagle Chemicals is offering EGP 39.00.

The state of play: As of last night, shareholders owning around 30% of the company — representing 7.28 mn shares — had agreed to sell their shares to NPH, according to Hapi Journal. None of the shareholders have responded to Eagle’s offer, according to the newspaper.

Remember: NPH or Eagle Chemicals need to acquire at least 75% of the company for the MTO to go through.

#2- The African Private Equity and Venture Capital Association’s annual summit:AVCA’s annual get-together and VC summit continues at the Four Seasons Nile Plaza today. Billing itself as the world’s largest Africa-focused private capital gathering, the five-day summit is bringing together investors with more than USD 1.5 tn in assets under management. Multilateral lenders and policymakers are also attending.

#3- It’s Fed week: The US Federal Reserve will hold its two-day policy meeting on Tuesday and Wednesday — and signs point to a 25-bps interest rate hike as the Fed works to contain soaring inflation, according to Bloomberg. A 25-bps hike will push the fed funds rate to 5-5.25% — the highest level since 2007 — and would be the tenth consecutive hike by the central bank since it started aggressively tightening policy to curb inflation last year.

USD direction hinges on Fed’s policy outlook: Hedge funds and investors wager that the greenback will erase all of the gains made last year as the Fed winds down its tightening cycle, according to the business information service writes. Traders widely expect the central bank to hike for the final time this week, before holding rates and starting to lower them towards the end of the year. Meanwhile, the UK and European central banks will continue their hawkish stances in the coming months, putting more pressure on the USD against major currencies.

PSA- Thursday is a national holiday in observance of Labor Day.


IN THE HOUSE TODAY- Religious Endowments Minister Mohamed Mokhtar Gomaa will answer questions from MPs on the ministry’s role in reforming religious discourse and improving the finances of mosque clerics.

In committee:

  • The Economic Affairs Committee will review the Egyptian Competition Authority’s role in shielding consumers from price gauging by retailers and others sellers amid the FX crunch.
  • The SMEs Committee will discuss measures taken by the Industrial Development Authority (IDA) to simplify licensing procedures for manufacturers. MPs also think that 13 industrial complexes failed to deliver on the IDA’s plans for 2023.
  • The Industrial Committee will look into issues facing investors at industrial zones in Minya and Borg Al Arab.

FX WATCH-

Net foreign liabilities hit a fresh high in March: Our net foreign assets position deteriorated again in March, falling to negative USD 24.5 bn from USD 23 bn in February, according to central bank figures, EFG Hermes said in a note to clients yesterday. Though central bank liabilities improved slightly during the month, net foreign assets were weighed down by the banking system, which saw liabilities widen to a record USD 15.5 bn on the back of a reduction of foreign assets.

CBE to consult staff: Net foreign liabilities have now grown by more than USD 3.8 bn over the past three months. The central bank is now expected to consult with IMF staff under our latestagreement (pdf) with the IMF, which says that the CBE will discuss NFAs if they fall by USD 2 bn or more in a three-month period (see page 11, pdf).

MEANWHILE- A successful t-bill auction: The central bank sold more than USD 1.0 bn of USD-denominated one-year treasury bills to investors yesterday at an average yield of 4.9%, according to central bank figures.

AND- Oil Ministry extends oil + gas tender until June: The Oil Ministry has extended its tender for 12 exploration blocks in the Mediterranean and Nile Delta until the beginning of June, Al Malreported yesterday, citing an unnamed government source. The tender was originally set to conclude on 30 April, but was extended to give companies more time to study the blocks offered. The tender includes six onshore blocks and six offshore blocks.

HAPPENING THIS WEEK-

National Dialogue kicks off: The National Dialogue will hold its first session on Wednesday. The dialogue was initially set to kick off in January but was postponed after the political parties failed to name their representatives to the sessions on time.

THE BIG STORIES ABROAD-

US banks continue to face pressure following seizure of First Republic: An index of regional US banks fell almost 3% during trading yesterday following the collapse of First Republic Bank. JPMorgan agreed to acquire most of the troubled lender on Monday while the rest will be taken over by the Federal Deposit Insurance Corporation — an arrangement that makes the bank the fourth victim of the recent banking crisis. (Reuters | FT | CNBC)

ALSO RECEIVING ATTENTION- The game of chicken over the debt ceiling: US Treasury Secretary Janet Yellen has again urged Congress to raise or suspend the debt ceiling before 1 June or the country will face the risk of defaulting on its financial obligations. (Wall Street Journal | Washington Post)

The Enterprise Exports & FDI Forum, our latest industry-specific conference, is taking place on Monday, 15 May at the Four Seasons Cairo Nile Plaza The Enterprise Exports & FDI Forum will give insiders and newcomers alike the chance to talk about how to develop an export-centered business and how their companies can help Egypt build an export-led economy that makes us a magnet for foreign direct investment (FDI).

Expect the gathering to be heavy on lessons learned in Egypt and other global growth markets — and to feature lots of success stories.You can learn more on our conference website here.

Some of the biggest names in business and finance are on board — are you? The Enterprise Exports and FDI Forum is taking place with the generous support of our friends, including:

Banking partners: Banque Misr | Al Baraka Bank | Emirates NBD | HSBC

Lead partners: DB Schenker | DP World | East Port Said Development | IDG | IFC | Madinat Masr

Event partners: Beyti | Concrete | GlobalCorp | Grant Thornton | Hassan Allam Utilities | Royal Ceramica

WANT TO BECOME A COMMERCIAL PARTNER? Ping a note to Moustafa, our head of commercial, here.

HAVEN’T REQUESTED AN INVITE YET? If you’re a C-suite exec, business owner, DFI staff, export executive, investor or banker, please fill out the form here to signal your interest, letting us know your name, title and where you work.

*** 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.

The World Aquatics Festival at Somabay: Three remarkable aquatic tournaments will be held together for the first time in Egypt, presented by the World Aquatics Federation and the Egyptian Swimming Federation in partnership with Somabay. Prepare yourself for the action. 8-9 May: Open-Water Swimming World Cup. 13-15 May: Artistic Swimming World Cup. 12-15 May: World Beach Water Polo Qualifiers

2

Infrastructure

Egypt’s sovereign fund has prequalified 17 consortiums for upcoming desalination tenders

In the running for the SFE’s desalination tenders: The Sovereign Fund of Egypt has prequalified 17 consortiums to bid in its upcoming tenders for renewables-powered desalination projects, it said in a statement (pdf) yesterday. The firms were chosen with the technical help of the Finance Ministry’s public-private partnerships (PPP) unit. More than 25 consortiums applied,the fund told Enterprise.

The big picture: Announced a few years ago to bolster the country’s water security, the government’s water desalination program aims to add 8.85 mn cbm/d of capacity by 2050, according to the release. Plants developed during the initial phase will process a combined 3.35 mn cbm/d by 2025, it said.

What’s next: The SFE is planning to have three or four of these plants tendered by 3Q 2023,an SFE spokesperson told Enterprise yesterday. Contracts for the remaining plants in the program’s first phase should be signed in the next 18-24 months, they added.

The prequalifying consortiums have been split into four groups determining the size of the plants they can bid for based on their previous experience in the field. Prequalified bidders include a number of major Gulf, Chinese, Japanese, and European companies, as well as top local names Infinity Energy, Hassan Allam Holding, Orascom Construction, and Elsewedy Electric. Companies chosen in the final stage will develop, construct, and operate the plants.

DFIs are lending a helping hand: The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are advising the SFE on technical and legal aspects of the public-private partnerships as well as ESG assessments for the projects “in order to bring to the market a solid investment product,” the release reads. The SFE will be investing in the plants alongside successful private-sector players.

Costs are TBD: The Finance Ministry is ascertaining the size of the required investment against the backdrop of global inflation and a weaker EGP, a senior government source with first-hand knowledge of the process told Enterprise back in March.

IN THE RUNNING-

The big hitters: Category A consortiums can bid for plants with a capacity of up to 1 mn cubic meters per day (cmb/d).

  • Hassan Allam Holding and Engie
  • Orascom Construction, Scatec, Toyota Tsusho Corp, Acciona Agua, and Metito Utilities
  • ACWA Power
  • Sumitomo Corporation
  • Enertech Holding Co, Utico FZC, and SEPCO
  • Concrete Plus, Abengoa, and Cuasar
  • Infinity Energy, GS Inima, and China Energy Engineering Corporation
  • AEW, Gama, SOGEX, and WABAG
  • Sacyr Agua
  • TAM Environmental Services, Desalia SL, and Al Ahly Capital
  • Meridiam Infrastructure Africa Fund II, Suez International, and Elsewedy Electric

In the running to build medium-sized plants with a capacity of up to 600k cbm/d:

  • AMEA Power Ltd, Safbon, ICAT
  • Aqualia, Globeleq, Ignis, and Samcrete
  • Taqa Arabia, and Al Ghanem International
  • Beijing Enterprises Water Group Ltd, and Asia-Africa Green Energy Investment

Up for smaller plants:

  • A consortium of Sinohydro Hong Kong Holding Ltd, Qingdao Desalination, and SEPCO III Electric Power can bid for plants with capacities of up to 400k cbm/d
  • A consortium of Desal Egypt, EMCO Engineering, Amarenco Solarize Egypt, and Redcon Construction are in the running to build the smallest projects with up to 200k cbm/d of capacity.
3

Privatization

Egypt gov’t could sell secondary stakes in EGX-listed petchem players Abu Qir and Sidpec

Abu Qir Fertilizers + Sidpec to join the privatization list? The Madbouly government is reportedly considering selling secondary stakes in state-owned, EGX-listed companies Abu Qir Fertilizers and Sidi Kerir Petrochemicals (Sidpec),Al Mal reports, citing unnamed sources it says are in the know. There is no publicly available information about the size of the possible transactions, the timeline, or who is advising.

Promising murmurs: Officials are currently re-evaluating Abu Qir’s market value in light of a positive 1Q 2023 performance and the depreciation of the EGP, a government official told Enterprise yesterday on condition of anonymity.

Strong 1Q performance could help: Both companies reported that their net incomes more than doubled in 1Q supported by strong revenue growth. Abu Qir revenues increased 80% y-o-y to EGP 6.4 bn during the quarter while Sidpec’s top line grew almost 70% to EGP 8.7 bn.

Market reax: Abu Qir’s shares fell 4.7% to close at EGP 47.37 apiece on Monday, whileSidpec’s shares lost 1.5% to close at EGP 22.16. The benchmark EGX30 was down 2.0% yesterday, leaving the market up nearly 19% since 1 January.

An easier sell? The fact that the two firms are already listed on the EGX as well as investors’ interest in the petrochemical and fertilizer sectors could make their inclusion in the government’s privatization program more likely, Al Mal’s sources are quoted as saying.

Gulf investors already own significant minority stakes in Abu Qir: The Saudi and Emiratiwealth funds together acquired more than 40% of the state-owned company last year. The purchases were part of a broader acquisition drive which saw the funds spend USD 3.1 bn to buy government-owned shares of EGX listed companies. Some 30.5% of the company is still held (pdf) by state-owned entities, a 5.0% stake is held by the Abu Qir workers’ union, and the remainder (c.23%) is in freefloat.

And they could be eyeing Sidpec post its merger with Ethydco:An unconfirmed report inFebruary suggested that Gulf investors could look to acquire between 16-20% of the company that will be formed by the ongoing merger between Sidpec and Egyptian Ethylene and Derivatives Company (Ethydco). Ethydco was among the 32 companies named on the privatization list.

Gov’t wants to raise USD 2 bn from asset sales by June: Prime Minister Moustafa Madbouly last week said the government is aiming to raise up USD 2 bn from asset sales by June. The PM was speaking a few days after S&P Global Ratings became the latest to warn that stalling reform efforts are raising the likelihood that the country slides into default.

4

Investment Watch

Saudi electronics retailer Extra shelves Egypt expansion plans

Saudi retailer scraps plans to set up shop in Egypt: Saudi electronics retailer Extra, formally known as United Electronics Company, has shelved plans to establish a subsidiary in Egypt, it said in a disclosure to the Saudi stock exchange yesterday. The board of directors made the decision on Sunday after reviewing a feasibility study, the statement reads, without giving color or detail on the rationale behind the decision. “Further announcements will be made to explain any material developments in this regard,” the statement says.

Background: Extra said in December 2021 that it would spend some EGP 1 bn to launch a fully-owned subsidiary in Egypt, a move that would have marked its first expansion outside the GCC. The Tadawul-listed company sought to acquire a 10% market share within a decade as it looked to tap the biggest consumer market in the Middle East.

The losses? “The expected negative financial impact of discontinuing the company's expansion plans in Egypt is about SAR 38 mn,” according to the statement. That’s the equivalent of c. EGP 314.6 mn. The company’s net income slipped 13% y-o-y in 1Q 2023 despite rising sales, according to preliminary figures released by the company last month.

The news got ink internationally:Reuters.

5

LEGISLATION WATCH

A new labor bill is back on the table in Egypt as El Sisi announces measures to support day laborers

The Labor Act is making a comeback:Controversial labor legislation withdrawn from the House of Representatives last year will be restudied by the government, President Abdel Fattah El Sisi said yesterday. Speaking at an event to mark Labor Day, the president said that representatives of employers and workers will be consulted on the bill (watch, runtime: 2:03:10).

Reminder: The bill was pulled from the House earlier this year to be redrafted by the government after backlash from the business community, which said the bill was lopsided in favor of workers. Prior to the redraft, the bill would have introduced new labor rights including legislating mandatory annual raises, caps on working hours, and longer maternity leave and notice periods, among other things.

Disability quotas: The president also said that the government will lean on public- and private-sector companies to meet the 5% employment quota for disabled workers. That tracks with anecdotal evidence Enterprise has of labor inspectors making the rounds in weeks to specifically review compliance with the quota,

Day laborers are getting an emergency fund: The Madbouly government will establish an emergency fund for day laborers and others in the informal economy, El Sisi said. The government will transfer the irregular workers’ social ins. dues to the fund and give them access to it in case of emergencies.

A one-time EGP 1k payout: Irregular workers not benefiting from ongoing social protection programs will be getting a one-time payment of EGP 1k as soon as the fund is established, El Sisi said.

The state calls these folks “irregular” workers — a term that applies to any part-time, seasonal, informal, or self-employed worker. Recent figures by Manpower Ministry officials put the number of irregular workers in Egypt at 10-11 mn. The government had disbursed a monthly EGP 500 stipend to seasonal workers throughout most of 2020 to help compensate them for lost income due to the pandemic.

ALSO- Aman ins. certificates are making a comeback,El Sisi said. The CDs were introduced in 2018 to provide ins. coverage and monthly pensions for irregular workers at 16% interest. The certificates required a deposit of between EGP 500-2.5k and offered coverage for natural and accidental death and one-time payments of EGP 10-250k or monthly pensions of EGP 200-1k over a five-year period. It is still unclear how the CDs will be adjusted to reflect recent inflationary pressures and the big dip the exchange rate has taken since 2018.

ALSO FROM EL SISI’S SPEECH:

  • Gov’t to push employers to comply with international labor standards;
  • Manpower Ministry to launch a platform for labor market information;
  • Ministries and private sector players to work towards gender equality in the workplace though the president stopped short of offering specific measures or targets;
  • State to launch a national campaign to encourage Egyptian youth to establish their own SMEs.
6

WAR WATCH

Sudan ceasefire fails to hold as fighting enters 18th day

Another ceasefire fails: Fighting between the Sudanese army and the Rapid Support Forces (RSF) continued yesterday despite both sides agreeing to a three-day extension of a ceasefire. Army units continued to carry out air strikes in Khartoum against RSF positions, which responded with anti-aircraft guns, according to local media.

The RSF is blaming the army: The militia saidthat the Sudanese army has “launched a vicious attack on the RSF medical headquarters … continues to violate the agreed upon temporary humanitarian ceasefire.”

Army claims it has significantly degraded RSF: In its latest status updateyesterday, the Sudanese armed forces said it had reduced the RSF’s combat capabilities by 45-55%, and claimed that the situation is “stable in all states of Sudan.”

The conflict could displace over 800k people, the UN High Commissioner for Refugees Filippo Grandi said in a tweet yesterday.

The Arab League speaks: Following its second emergency meeting in April, the Arab League echoed regional calls for a peaceful end to the conflict that prioritizes the Sudanese people.

Another hope for a resolution? The two opposing sides have agreed to send over representatives to take part in negotiations, UN Special Representative for Sudan Volker Perthes told the Associated Press. Should they go ahead, the negotiations will initially focus on two sides agreeing on a stable and reliable ceasefire, he said.

Updated figures are hard to come by: The death toll has not been updated since 29 April when it stood at 528, while Egyptian officials have not shared the latest count of Sudanese refugees who have crossed the border into Egypt. The Egyptian Foreign Ministry said at the weekend that more than 16k people had crossed the border, most of whom were Sudanese refugees.

7

LAST NIGHT’S TALK SHOWS

Egyptian talk shows note Labor Day and new measures to support irregular workers

Labor Day and the president’s speech dominated the airwaves last night: The nation’s talking heads celebrated Labor Day and President Abdel Fattah El Sisi’s policy announcements to ease conditions for irregular workers. “We will take President El Sisi’s decisions as our guide moving forward,” Egyptian Trade Union Federation Mohamed Gobran told Al Hayah Al Youm (watch, runtime: 6:49). Kelma Akhira (watch, runtime: 3:21 | 2:47 | 4:23) and Masa’a DMC (watch, runtime: 8:20) also covered the news. We have the details in this morning's Regulation Watch, above.

The situation in Sudan continued to get coverage:Emigration Minister Soha Gendy (watch, runtime: 3:54) both took to the airwaves to reassure citizens of the state’s preparedness to host the Sudanese citizens who had fled to Egypt amid the ongoing violence in their hometown.

Why did the Supply Ministry make commodities pricier? A lot of the components for these commodities are imported and therefore saw a major price hike over the past period, Assistant Supply Minister Ibrahim Ashmawy told El Hadidi (watch, runtime: 10:45). “If we increase the amount of social support we will widen the budget deficit,” he said.

Remember: As of yesterday, 31 subsidized commodities got more expensive as part of the ministry’s move to cut back on costs. 

SOS Children's Village closure: Social Solidarity Minister Nevine El Qabbaj spoke with El Hekaya (watch, runtime: 7:35) to confirm that the Nasr City orphanage will be closed after controversy broke out over the news on social media. The minister said that residents would be relocated, with both adults and children found appropriate alternative housing. 

AND- The nation’s talking heads mourn the death of actor Mostafa Darwish, who passed away yesterday morning at the age of 43. Darwish is best known for his role in the comedy series “B 100 Wish,” which aired during Ramadan 2020. Kelma Akhira (watch, runtime: 1:22), Al Hayah Al Youm (watch, runtime: 4:03), and Masa’a DMC (watch, runtime: 3:53) all paid tribute to the late actor.

CORRECTION: This story was corrected on 2 May, 2023 to reflect that Social Solidarity Minister Nevine El Qabbaj spoke on the SOS Children's Village, not the situation in Sudan. 

This publication is proudly sponsored by

8

EGYPT IN THE NEWS

Egypt releases second Al Jazeera journalist as Qatar ties warm

Leading the conversation on Egypt this morning: Al Jazeera journo freed. Egyptian authorities yesterday released Al Jazeera journalist Hisham Abdel Aziz after serving four years in pre-trial detention, according to a tweet posted by his wife yesterday. The head of the Egyptian Journalists’ Syndicate, Khaled El Balshy, confirmed to Reuters that the journalist had returned home. Abdel Aziz is the second Al Jazeera journalist to be released in recent months as Egypt and Qatar look to move beyond nearly a decade of tensions. (Reuters | Associated Press | BBC)

9

Also on our Radar

Regulators just greenlit Egypt’s first ever gold investment fund. PLUS: Data center upgrade, new Sawari tech fund, oil + gas exploration.

CAPITAL MARKETS-

#1- FRA greenlights Egypt’s first gold investment fund: Asset managers EvolveInvestment Holding and Azimuthave gotten the greenlight from the Financial Regulatory Authority to launch a gold-backed investment fund, Asharq Business reports, citing three sources it says are in the know. The fund will be managed by Azimut, while Catalyst Management Services will set daily pricing. Evolve previously announced plans to launch the exchange-traded gold-backed fund.

Soaring inflation and a protracted currency crisis have seen Egyptians pouring savings into gold. The price of 21-carat gold has more than tripled since the beginning of 2022 and has soared 60% in 2023 alone, and was trading at EGP 2,650 yesterday.

#2- EFG Hermes has launched a new Direct Market Access platform on Microsoft’s cloud computing service, Azure, it said in a press release (pdf) yesterday. The platform is 160 times faster than EFG Hermes’ former DMA system, allowing it to offer clients much faster trading and better access to financial markets.

TELECOMS-

US internet service provider GPX will invest EGP 2.7 bn to expand its Cairo 2 DataCenter, the company said in a statement yesterday. The company will add an additional 12 MW of power to the facility, it said. Redcon Construction, which built the facility 2013, will work with GPX on the upgrade.

STARTUPS-

Sawari Ventures eyes USD 200 mn tech fund: Sawari Ventures is in talks with investors to launch a USD 200 mn fund to invest in tech startups across Egypt and Africa, Al Masdar reports, citing an interview with Managing Partner Hani Al Sonbaty.

That’s a wrap on fund no. 1: Sawari has deployed the entire USD 70 mn it raised for its first fund, having invested in 20 Egyptian companies over the past four years, he said. Most recently the firm has invested in fintech startup Blnk, edtech platform Almentor, and MoneyFellows.

COMMODITIES-

State grains buyer GASC has launched an international wheat tender, Reuters reported. The tender is seeking offers on a free on board basis for shipment 10-30 June and/or 1-20 July. Traders have until the end of today to submit their bids.

LEGISLATION-

#1- New bill would hand tax breaks to firms working on nuclear projects: MPs yesterday gave preliminary approval to legislation that hands tax exemptions to local and international companies working on the Dabaa nuclear plant.

What’s next: The amendments will be put up for a final vote in an upcoming session, likely next Tuesday.

#2- House committee greenlights fresh Eni oil + gas exploration: The House Energy and Environment Committee has approved a draft bill that would allow the Oil Ministry to contract Eni subsidiary IEOC to launch oil and gas exploration operations at three East Mediterranean concessions, Al Mal reported.

SHIPPING-

Transport Ministry-affiliated AlKahera Company for Ferries and Maritime Transportand Korean shipbuilder Dae Sun will build two multi-purpose container ships under an agreement signed yesterday, according to a ministry statement. The agreement comes as part of Egypt’s plans to build a strong commercial fleet to boost its trade to regional markets and leverage its strategic location on the Red and Mediterranean seas, the statement said, without disclosing the value of the agreement.

LAW-

Egyptian law firm El Said Darwish & Partners announced its “strategic associationwith Emirati law firm Ibrahim & Partners, according to a statement.

DIPLOMACY-

Operation Assad Rehabilitation is slowly making progress: Arab foreign ministers continued discussing how to bring Syria back into the Arab League and end the country’s 12-year civil war during talks in Amman yesterday.

At the talks: Foreign Minister Sameh Shoukry joined the foreign ministers of Jordan, Syria, Saudi Arabia, and Iraq for the meeting in the Jordanian capital.

The headline: Diplomats discussed returning the mns of Syrian refugees living in neighboring countries, while Syria’s foreign minister agreed to step up efforts to crack down on narcotics trafficking across the country’s borders, according to a joint statement.

10

PLANET FINANCE

Saudi net foreign assets slump to 13-year low

Saudi NFAs fall to 13-year low despite Aramco dividend boost: Saudi Arabia’s net foreign assets dropped to USD 419 bn in March from USD 433 bn the month before, according to central bank figures out yesterday. This is the lowest figure since July 2010, according to Bloomberg. The lower figure comes despite Saudi Aramco in March increasing dividend payouts, a key revenue source for the government.

Adnoc Gas signs 3-year LNG supply agreement with TotalEnergies: Adnoc Gas announced a three-year agreement with TotalEnergies for the supply of liquified natural gas (LNG), according to a press release (pdf). The estimated value of the agreement falls between USD 1 bn and USD 1.2 bn based on current market conditions, and it will run through to 2025.

Remember:Adnoc Distribution acquired a 50% stake in the French company’s Egypt subsidiary earlier this year.

EGX30

17,311

-2.0% (YTD: +18.6%)

USD (CBE)

Buy 30.84

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,286

-0.2% (YTD: +7.7%)

ADX

9,704

-0.9% (YTD: -5.0%)

DFM

3,538

-0.2% (YTD: +6.1%)

S&P 500

4,168

0.0% (YTD: +8.6%)

FTSE 100

7,871

+0.5% (YTD: +5.6%)

Euro Stoxx 50

4,359

0.0% (YTD: +14.9%)

Brent crude

USD 79.37

-1.2%

Natural gas (Nymex)

USD 2.32

-3.9%

Gold

USD 1,990.30

-0.4%

BTC

USD 27,894

-5.7% (YTD: +68.5%)

THE CLOSING BELL-

The EGX30 fell 2.0% at yesterday’s close on turnover of EGP 2.09 bn (about 15% above thet railing 90-day average). Foreign investors were net sellers. The index is up 18.6% YTD.

In the green: Eastern Company (+1.5%), Ezz Steel (+0.7%) and Abu Dhabi Islamic Bank - Egypt (+0.4%).

In the red: AMOC (-10.7%), Abu Kir Fertilizers (-4.7%) and Qalaa Holdings (-4.5%).

11

Going Green

Egyptian ecotourism in practice: How can visitors and businesses help preserve protected areas?

Where is ecotourism working — and where could things be improved? In part one of our deep dive into Egypt’s ecotourism industry last week, we took a look at theregulatory challenges facing the industry. This week, we look at the current practices of travelers and industry leaders, and how to protect delicate ecosystems and unique cultural heritage sites from overcrowding, environmental damage, and harmful behavior.

Our national parks hold a wealth of biodiversity and cultural heritage: Our 30 protectedareas (PAs) cover some 15% of the country’s total land mass and 9% of coastal and near-shore areas, including “pockets of incredibly diverse and fragile ecosystems,” according to a 2012 Egyptian Environmental Affairs Agency (EEAA) report (pdf). PAs are home to nearly 150 species of threatened or endangered animals as well as two UNESCO World Heritage Sites (Saint Catherine and Wadi El Rayan.)

That’s a huge draw for tourism: The EEAA says that while the value PAs bring to the economy has not been systematically calculated, it is “immense” — noting that the coral reefs at Ras Mohamed alone were worth some USD 141-190 mn in annual tourist revenue in 2012. Each USD invested in Wadi el Gemal national park would return USD 50 to the economy, it added.

But with development comes risks to delicate ecosystems: The economic potential of PAs as “premium tourism destinations” is balanced by the threat that development brings to key ecotourism spots. “There is tremendous human development pressure on those areas that are most important for biodiversity,” the EEAA writes, “resulting in high degrees of habitat destruction, conversion, and degradation.” Other threats include hunting, pollution, invasive alien species, and climate change.

Case in point: St Catherine,which is undergoing a major redevelopment project that has seen a new asphalt road paved through the protectorate’s namesake town. The area is home to some 7k Bedouin people, many of whom live in scattered remote settlements that are largely inaccessible to service providers. “The asphalt road in Saint Catherine is environmentally disastrous, but the residents like it because it makes things easier for them,” says Aamen Abuellil, founder and CEO of adventure travel operator Ghamer. “When they need to reach the hospital it takes half an hour and not one full hour.”

Better roads bring more tourists — with mixed results. Locals in Fayoum’s Tunis village were excited by the possibility of more visitors being able to reach the ecotourism hotspot by bus after the opening of a new asphalt road. But some craftspeople soon became disappointed by the behavior of the new arrivals. Those who arrive by bus “often cruise my shop, take lots of selfies, break my goods, and walk away without buying anything,” says pottery maker Sabah Ahmed. “This Eid, I didn’t even open my shop because I was afraid of tourists breaking my pottery,” Ahmed adds.

Ecotourism requires sensitivity from visitors: Some ecotourist hotspots have spiked in popularity thanks to the sharing of sustainable tourism content on social media — but visitors need to think about more than just framing the perfect shot, Ghamer’s Abuellil says. “Some people like to go and take pictures, but they act like outsiders and they don’t preserve the environment,” he says. “People need to educate themselves on the history, nature, and background of the place. [They need] layers of deep understanding.”

And the growing ecotourism industry also brings cultural shifts: “When a place gets popular, it attracts workers from outside the community, who take the jobs of locals, and that makes the experience incomplete,” Abuellil says. “You go to a local place to enjoy the local culture, food, history, nature and way of life.”

Ecotourism spots are working to embody sustainable values: “In our village, we used refurbished antique doors throughout the whole building as well as natural fabrics for the furnishings and lighting fixtures made of recycled iron” says Mervat Abdel Nasser, founder of New Hermopolis Eco Village in Minya. “Even the mattresses are made of cotton in the old Egyptian style, which also prevents this skill and trade from dying,” Abdel Nasser adds.

And some are also preserving cultural heritage in the areas where they operate:“Culture and heritage education are important to any ecological community,” Abdel Nasser says. “Our art and culture program encourages and fosters local talent and allows this creativity to be showcased in several cultural events throughout the year, particularly in our Thoth’s Festival that began in 2011” and revives an ancient Egyptian celebration, adds Abdel Nasser.

Not all change is bad: “If you go to Saint Catherine now, you will find the Bedouins wearing hiking shoes and carrying light backpacks. They picked this up from travelers,” says Abuellil. “This is an example of how travelers could have a positive impact on locals.”

But these areas require careful management: Eco-lodges were in March formalized for the first time by the Tourism Ministry, allowing them to exist as official legal entities — and potentially opening the door to support that some say is much needed. “The protectorate needs to provide local camps with legal protection — there is no ecotourism without local people,” one Ras Mohamed camp owner who asked to remain anonymous told Enterprise. “I am afraid that tomorrow an investor could come and throw money to turn this into a hotel or something and bring people from outside Sinai. Then you lose the true Bedouin experience and essence of the place.”

One success story: The Samadai project south of Marsa Alam. Also known as the Dolphin House, the Samadai site protects marine life at a reef frequented by dolphins off the Red Sea coast. Run by the Hurghada Environmental Protection and Conservation Association (HEPCA), the EEAA, and Red Sea governorate and protectorate authorities, the site includes separate areas for diving, swimming, and snorkeling, as well as no-entry areas to provide a safe space for dolphins to rest. Rules limit the size and number of boats in the area and the hours in which they can visit. The effective enforcement of these clear guidelines has protected the welfare of hundreds of dolphins and the wider reef and ecosystem from an influx of tourists from all over the world.

We need more of the same: “If this model is replicated and adapted to different areas it could reduce the stressors on marine life before it’s too late,” says environmentalist Ahmed El Droubi of Climate Action Network. “I appreciate that the government needs to bring in tourists for the much-needed hard currency, but this needs to be done in a manner that suits capacities in addition to increasing awareness and reducing the adverse impacts of visitors,” he adds. “Coastal development need not entail construction along the entire coast.”


Your top green economy stories for the week:

  • Kom Ombo solar plant receives USD 123 mn in financing: Saudi renewable energy developer ACWA Power yesterday inked a USD 123 mn financing package to develop the 200 MW Kom Ombo solar power plant.
  • Egyptian-German JV to build two solar plants in Al Wadi El Gedid: A joint venture between Egypt-based Smart Engineering Solutions (SES) and German solar company Frenell will build two solar plants utilizing concentrated solar technology.
  • Could Germany’s Wintershall store carbon in Egypt? Wintershall Dea is studying potential offshore carbon storage sites in Egypt and Argentina.

APRIL

26 April - 5 May (Wednesday-Friday): African Basketball Championship.

Late April – 15 May: 1Q2023 earnings season.

MAY

1-5 May (Monday-Friday): African Private Equity and Venture Capital Association annual summit, Four Seasons Nile Plaza, Cairo.

2 May (Tuesday): National Paints Holding’s and Eagle Chemicals’ MTOs for Pachin ends.

2-3 May (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 May (Wednesday): National Dialogue begins.

4 May (Thursday): National holiday in observance of Labor Day (TBC).

7 May (Sunday): Senate back in session.

7-11 May (Sunday-Thursday): First round of applications for sixth phase of export subsidy program.

9-11 May (Tuesday-Thursday): First edition of the Arab Actuarial Conference, Cairo.

12-15 May (Friday-Monday): Egypt Fashion Week.

14 May (Sunday): Expat car import scheme ends.

14 May (Sunday): EgyptAir to launch a new route to Dhaka, Bangladesh.

14 May (Sunday) Egytrans’ shareholders to vote on NOSCO acquisition.

15 May (Monday): Enterprise Exports & FDI Forum, Four Seasons Hotel Cairo at Nile Plaza.

16-18 May (Tuesday-Thursday): Egypt will host its first conferenceon cybersecurity and defense intelligence systems (CDIS-Egypt).

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

18 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

19 May (Friday): Arab League summit, Riyadh.

19-21 May (Friday-Sunday): G7 summit, Hiroshima, Japan.

20-21 May (Saturday-Sunday): eGlob Expo, St. Regis Almasa Hotel, Cairo.

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

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

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

JUNE

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

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

10 June (Saturday): Thanaweya Amma examinations begin.

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

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

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

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

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

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

30 June (Friday): June 30 Revolution Day.

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

JULY

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

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

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

18 July (Tuesday): Islamic New Year.

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

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

23 July (Sunday): Revolution Day.

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

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

Late July-14 August: 2Q2023 earnings season.

AUGUST

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

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

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

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

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

SEPTEMBER

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

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

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

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

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

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

25 September (Monday): Nasdaq deadline for Swvl Holdings Corp to increase its market value of publicly held shares to a minimum of USD 15 mn.

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

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

OCTOBER

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

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

6 October (Friday): Armed Forces Day.

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

Late October-14 November: 3Q2023 earnings season.

26 October (Thursday): Daylight saving time ends.

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

NOVEMBER

November: Cairo to hostIntra-African Trade Fair.

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

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

DECEMBER

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

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

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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

Summer 2023: EGX to launch a shariah-compliant index.

1H 2023: GAFI roadshow set to launch to drum up foreign investment for golden licenses

1H 2023: Abu Dhabi Islamic Bank intends to launch a digital consumer finance company

2H 2023: Egyptian government expected to sign agreements with a consultant for the EuroAfrica electricity interconnector.

2H 2023: President Abdel Fattah El Sisi and Turkish President Recep Tayyip Erdogan expected to hold a summit.

4Q 2023: EGX to launch its new futures exchange.

End of 2023: A Developments’ first phase of the Lazoghly development completed.

November 2024: Egypt to host the 12th session of the World Urban Forum (WUF12).

2Q 2025: Safaga Terminal 2 to initiate operations.

Now Playing
Now Playing
00:00
00:00