Language
العربية

Sections

About

Privacy & Support

Get EnterpriseAM daily

Available in your choice of English or Arabic

Tuesday, 19 Sep 2023

What We're Tracking Today
Ipo
M&a Watch
Debt Watch
Debt Watch
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Diplomacy
Going Green
Calendar

See you for Day 2 of the Enterprise Finance Forum

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

What We're Tracking Today

It’s Day 2 of the Enterprise Finance Forum.
2

IPO

The developer of Egypt’s new capital could go public in 2024.
3

M&A WATCH

Gulf investors eyeing United Company of Pharmacists acquisition.
4

DEBT WATCH

SCZone to borrow EGP 30 bn to fund green hydrogen infrastructure.
5

DEBT WATCH

Edita turns to NBK to finance Fancy Foods acquisition.
6

M&A WATCH

Post for Investment acquires 40% of logistics startup Roaderz.
7

PLANET FINANCE

Oman could be heading to its biggest-ever IPO.
8

Going Green

Is Egypt still a leader in the region’s green transition?

Tuesday, 19 Sep 2023

What We're Tracking Today
Ipo
M&a Watch
Debt Watch
Debt Watch
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Diplomacy
Going Green
Calendar
1

What We're Tracking Today

It’s Day 2 of the Enterprise Finance Forum

Good morning wonderful people. The second day of the Enterprise Finance Forum kicks off in just a few hours at the St. Regis Hotel on the Nile Corniche. We look forward to seeing many of you there.

Yesterday’s gathering was outstanding — we had a full house on hand to enjoy unparalleled networking and insightful on-stage interviews with industry leaders. On behalf of all of our guests, our sponsors, and our partners, thank you to everyone who joined us on stage.

** We get underway this morning at 8:00am with our networking breakfast, with the opening panels starting at 9:00am.

You won’t want to miss today’s agenda. Our first panel tackles how to lead and grow a business in an unprecedented time of uncertainty. Our other discussions today will see top industry figures digging into:

  • Digital / challenger / neo banks;
  • How to transform a financial institution;
  • Whether NBFIs are a bubble;
  • Why nobody wants to be a banker;
  • What lawyers are seeing that the rest of us aren’t.

** For those of you joining us, please remember to bring the personal QR code you received yesterday on both days to ensure access to the venue — and your badge from yesterday, if you can.

There will be plenty of parking available.

Tap or click here to view the FULL AGENDA with SPEAKERS.

We’ll have panel-by-panel coverage of the Enterprise Finance Forum starting this coming Sunday — one panel a day. And yes, we’re hoping to convince McKinsey partner Larry Lerner to allow us to share a soft copy of his super deck on artificial intelligence. Larry is McKinsey’s global leader for banking and securities analytics. A former banker himself, he heads the firm’s global taskforce on generative AI for banking and flew in from Washington, DC, to speak with us all.

This flagship forum is the latest in our must-attend series of invitation-only events, where CEOs, bankers, investors, founders, and corporate leaders will meet to discuss the trends shaping the future of banking, finance, NBFIs, and fintech — and of their clients.

** We are honored to count some of the region’s most important financial institutions as our partners for this special event. The Enterprise Finance Forum could not take place without the support of our partners including Banque Misr, Al Baraka Bank, FABMISR, HSBC, Mashreq, Banque du Caire, CI Capital, Global Corp, Visa, Hassan Allam Utilities, the IFC, and Post for Investment.

FROM THE RUMOR MILL-

Delta Sugar + Mopco deny share sale rumors: The state-owned Delta Sugar Company (pdf) and Mopco (pdf) both denied knowledge of a report in Al Borsa that claimed the government is looking to sell shares in the firms. Delta Sugar said it had not received any offers to purchase shares while Mopco said it had “no knowledge of the published news.”

This isn’t the first time Delta Sugar has had to deny rumors in the press: The company was forced to deny links to ADQ last month after CNBC reported that the sovereign wealth fund had entered talks with the government to purchase a 10-15% stake.

Remember: The government has already sold almost half of Mopco to ADQ and the P ublic Investment Fund.

WATCH THIS SPACE-

The Finance Ministry will draft a new income tax law: That’s from Finance Minister Mohamed Maait, who was speaking at an ins. conference yesterday, according to Al Borsa. The new law will “take into account all economic and technological developments,” according to the newspaper. We won’t pretend to know what that means.

HAPPENING TODAY-

The Al Ezz Dekheila share buyback kicks off today: Steel maker Ezz Dekheila Steel will invite shareholders objecting to its delisting decision to sell their shares back to the company starting from today, it said in a statement (pdf) yesterday. The company is offering to buy the shares at EGP 1,250 apiece, a 4% premium on the current share price. Shareholders have until next Monday, 25 September, to make a decision.

Remember: Al Ezz Dekheila announced plans in July to delist from the exchange in the wake of its agreement to buy back the government’s 31% stake in the company.

HAPPENING THIS WEEK-

It’s interest rate week here at home: The Central Bank of Egypt is expected to leave interest rates unchanged when it meets on Thursday, according to our customary poll of analysts. All seven of the people we spoke to don’t think the central bank will act due to easing monthly inflation and the need to retain policy space for the anticipated devaluation. A Reuters poll returned a similar forecast.

And abroad:

  • The Federal Reserve: The US Federal Reserve will kick off its two-day policy meeting today. Expect rates to stay where they are, at least for now.
  • The Bank of England: Interest rates in the UK are expected to rise for a 15th consecutive time on Thursday, with a Reuters poll of analysts forecasting another 25-bps hike to 5.5%. This would be the highest Bank Rate since 2007.

Conference season gets well underway this week, with several several events opening their doors in the capital and beyond:

  • Sunday-Tuesday: Sharm Rendezvous ins. conference, Rixos Premium Seagate, Sharm El Sheikh.
  • Wednesday-Saturday: Cityscape Egypt, Egypt International Exhibition Center, Cairo.

Shoukry is in the Big Apple for the UN General Assembly: Foreign Minister Sameh Shoukry is in New York this week to participate in the UN General Assembly kicking off on Tuesday. We have more on the minister’s schedule yesterday in this morning’s diplomacy section, below.

The general debate kicks off today: The leaders of Jordan, Qatar, Algeria and Turkey will all give their statements on the first day following UN Secretary-General Antonio Guterres’ opening speech. The US, Germany, Japan and Ukraine will also speak today. It’s no t yet clear whe n President Abdel Fattah El Sisi will address the assembly.

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

ROAD TO COP28–

Environment Minister Yasmine Fouad will co-chair climate finance negotiations during the upcoming COP28 summit with her Canadian counterpart Steven Guilbeault, the Environment Ministry said Monday. Talks are expected to begin in mid-September and run through to the end of the conference in mid-December.

Remember: As the host of last year’s COP27 summit, Egypt currently holds the COP presidency, and will hand it over to the UAE in the coming weeks.

THE BIG STORIES ABROAD-

#1- Instacart goes big: The online grocery delivery firm has priced its IPO at the top of the range, putting it on course to raise USD 660 mn. Remember: The company’s USD 9.9 bn valuation still makes the IPO a huge down round from its previous USD 39 bn valuation in 2021. (Bloomberg | Financial Times | Wall Street Journal)

#2- The oil rally: Bloomberg’s lead story this morning is sounding the alarm about a possible return to USD 100 oil as growing tightness in the markets continues to lift prices. Brent, which has risen more than 30% since its March low, came close to surpassing USD 95 a barrel yesterday. Some crude grades are already trading above USD 100 per barrel, including Nigeria's Qua Iboe and Malaysian Tapis.

We’re not trying to lift prices, insists Saudi energy minister: Saudi Energy Minister Abdulaziz bin Salman said yesterday that the country’s decision to extend supply curbs through the end of the year was about stabilizing the market rather than “jacking up prices.” Riyadh and Moscow’s decision earlier this month has caused analysts to warn of historic market tightness and OPEC data suggests that the curbs are setting the market up for its largest supply deficit in a decade in the final quarter of the year. (Bloomberg | Financial Times | Reuters)

#3- There’s beef between India and Canada: Canada has expelled an Indian diplomat after Prime Minister Justin Trudeau accused the Modi government of assassinating a Sikh separatist leader on Canadian soil. (Associated Press | Reuters | New York Times)

#4- Iran, US carry out historic prisoner exchange: The US and Iran completed a rare prisoner exchange yesterday, involving the release of five American detainees for five Iranians held in the US. The swap, which took place in Qatar, came alongside a US pledge to release USD 6 bn in frozen Iranian funds. (Associated Press | Reuters | New York Times | Washington Post | Wall Street Journal)

*** 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: Is Egypt still a leader in the region’s green transition?

Tags:

Get ready to embark on a sensational journey of entertainment: From October through December, London will be illuminated by the brilliance of three remarkable events sponsored exclusively by Somabay. The laughter will be unstoppable at the uproarious Egyptian Trilogy comedy tour, followed by the enchanting Samar Tarik. Brace yourselves for a captivating finale with the mesmerizing Farah El Dibany. Somabay brings you an unforgettable trifecta of events that will leave you utterly captivated and eagerly anticipating each spectacular moment.

2

IPO

The developer of Egypt’s new capital could go public in 2024

That ACUD IPO is still alive: The company in charge of developing the new administrative capital could move forward with an IPO on the EGX during the first half of 2024, according to Asharq Business. Administrative Capital for Urban Development (ACUD), a joint venture between the military and the Housing Ministry, is considering offering 5-10% of its shares to investors, the news outlet reported yesterday, citing an interview with the chairman of the company, Khaled Abbas.

This has been a while coming: The prospect of the company going public was first raised by President Abdel Fattah El Sisi back in August 2021 when he floated the idea of a share sale by 2023. The following year CI Capital was hired to advise on the offering.

Setting expectations high: The company emphasized the potential size of the share sale following the president’s initial announcement, with then-company chairman Ahmed Zaki Abdeen telling Bloomberg that ACUD could become the largest IPO in Egypt’s history.

It’s unclear what kind of valuation the company could fetch, with the details of its balance sheet and assets remaining secret. El Sisi said back in 2021 that ACUD had EGP 3-4 tn of assets under management as well as liquid assets worth EGP 100 bn.

And it’s not certain what would be offered: Though the president said initially that ACUD itself would be listed on the exchange, comments made by Abdeen to the press the following year suggested that it may instead look to sell shares in several of its subsidiaries.

Refresher: Since being established in 2016, ACUD has been in charge of selling the 700 square-km new capital land bank to developers and government bodies, awarding construction and services contracts, and supervising the development of the city. The military owns 51% of ACUD and the Housing Ministry holds the remaining 49%.

ALSO- Gulf developers could work on projects in the new capital: ACUD will this year announce agreements with Gulf investors who will work on developing projects in the second and third phases of the new capital, Abbas told the news outlet. The company received several offers from industrial developers to build projects on the 1 mn square-meter industrial zone, and is in the process of inking an agreement with an unnamed Emirati company to develop a 1000-feddan industrial zone, he said.

Gulf real estate developers and contractors have by and large yet to get involved with the new capital, with few big names working on construction or committing to real estate developments since the project started in 2015. UAE-based contractor ASGC was contracted to construct residential blocks and infrastructure works in several areas of the city, while Sky, a subsidiary of Emirati developer Diamond Group, began work on a project in the new capital in 2021.

Local developers also want to pitch in: Three major local companies that work in industrial development have submitted offers to develop projects in the industrial zone, he added.

Tags:
3

M&A WATCH

Gulf investors eyeing stake acquisition in Egyptian pharma distributor United Company of Pharmacists

A nother Gulf acquisition of an Egyptian pharma group in the works? A number of Gulf investors are interested in acquiring a stake in distressed pharma wholesaler United Company of Pharmacists(UCP), Al Mal reported yesterday, citing sources familiar with the matter. The company, one of the largest pharma distributors in Egypt, is looking to find new sources of finance to solve a growing financial crisis at the firm caused by the accumulation of “huge” amounts of debt, the newspaper reports.

Who’s interested? Saudi company Tamer Group was the only investor named by the newspaper as having entered negotiations with UCP over a potential acquisition.

What we know: UCP’s general manager Mohamed Galal confirmed to Enterprise yesterday that several Arab investors and funds have expressed interest in investing but that the company has not yet received any takeover offers. We were unable to confirm the identities of any of the investors.

Who owns what: The family of the founder, Hossam Omar, jointly own UCP with an American partner in a 50/50 split, who Galal declined to disclose when we asked. We believe the company to be Walgreens Boots Alliance, which acquired UCP’s former shareholder Alliance Boots in 2014. The company wants to sell its entire stake in the company, according to Al Mal.

UCP is a major player: The group has a third of the share of the local pharma distribution market, according to the group’s website. UCP currently supplies 38.5k pharmacies and 2k hospitals.

Just one option: Daily News Egypt reported last month that UCP has been looking at several options for financially restructuring the company, including a stake sale to a strategic investor and fresh borrowing.

What’s next: Galal said that he expects a partnership agreement or investment framework to be finalized within the next three months.

POST FOR INVESTMENT INVESTS IN ROADERZ-

The state postal service just took a minority stake in a logistics startup: The investment and logistics arms of Egypt Post will acquire a 40% stake in logistics platform Roaderz, the company said in a statement yesterday. Post for Investment and Post for Distribution will both acquire shares in the company, according to the statement, which didn’t disclose the transaction value.

Roaderz: Founded in 2021 by e-payments giant Fawry, logistics startup Mylerz, tech solutions firm Softec, and Confida Ventures Managing Partner Ammar Zawaideh, Roaderz is a crowdsourcing platform that connects couriers and small delivery firms with e-commerce merchants, while allowing sellers to request couriers on demand or schedule their services in advance.

Tags:
4

DEBT WATCH

Egyptian banks to extend EGP 30 bn to SCZone for green hydrogen projects

SCZone wants a big loan to fund green hydrogen projects: The General Authority for the Suez Canal Economic Zone (SCZone) is on course to take out a 15-year, EGP 30-bn loan from a syndicate of local banks to finance the infrastructure for a number of green hydrogen projects, a source at the Finance Ministry told Enterprise. The authority has secured the Finance Ministry’s guarantee on the loan.

It’s not just in EGP: While most of the loan will be denominated in EGP, part of it will be paid in USD to finance imported components, according to As harq Business, which first reported the news.

The lenders: Led by the National Bank of Egypt (NBE), the syndicate includes Banque Misr, Suez Canal Bank, CIB, Banque du Caire, and Arab African International Bank.

Not as long as it wanted: The SCZone had originally asked for a 20-year repayment term, which was declined by the lenders, according to our source.

Not the first of its kind: The authority in 2021 borrowed some EGP 10 bn from the same six banks to develop the Ain Sokhna and Port Said ports, our source said. The loan was also guaranteed by the Finance Ministry.

Remember: Egypt wants to capitalize on the growing global interest in green hydrogen as a low-carbon energy source by establishing itself as one of the region’s leading suppliers. The government signed nine framework agreements for green hydrogen plants on the sidelines of last year’s COP27 climate summit and has at least two more agreements in the works. Prime Minister Moustafa Madbouly earlier this month issued a decision to set up the council for green hydrogen, which is set to oversee the implementation of the government’s long-awaited green hydrogen strategy.

Tags:
5

DEBT WATCH

Edita turns to NBK to finance Fancy Foods acquisition

NBK will help Edita acquire Fancy Foods: Edita Food Industries has signed agreements to take out two seven-year loans worth a combined EGP 390 mn to finance subsidiary Edita Frozen Food Industries, it said in an EGX disclosure (pdf) yesterday. The lender in question is the National Bank of Kuwait, head of investor relations and corporate affairs Menna Shams El Din told us yesterday.

Remembe r: Edita earlier this year acquired 100% of frozen bakery producer Fancy Foods, which has since been renamed Edita Frozen Food Industries. The acquisition marks Edita’s first foray into the frozen baked goods market.

The breakdown: Worth EGP 190 mn, the first of these loans will be used to refinance 50% of the amount Edita paid to acquire the company, Shams El Din told us yesterday. The other loan, worth EGP 200 mn, will fund its expansion, she said.

Edita is focusing on developing its new purchase: Edita has been upgrading the Edita Frozen Food Industries’ factory and plans to launch a new portfolio of products under the brand name in 4Q 2023, Shams El Din said. The company told us in May that it is planning to invest EGP 400 mn to expand the business this year.

Edita has another loan of up to USD 30 mn lined up: Edita is in the process of securing a loan of up to USD 30 mn from the International Finance Corporation to support its working capital and fund fresh capex.

Tags:

6

LAST NIGHT’S TALK SHOWS

Presidential elections, soaring tuition fees, Sisi’s meeting with MBZ all get airtime

It was a mixed bag of nuts on the airwaves: There was more speculation about the upcoming presidential election, coverage of El Sisi’s trip to Abu Dhabi, a sit-down interview with the CEO of Madinet Masr, and coverage of surging school tuition fees.

Elections in mid-December? Kelma Akhira host Lamees El Hadidi said that the National Elections Authority could announce the timeline for the upcoming presidential elections next month with polls likely taking place in mid-December (watch, runtime: 6:20).

Her reasoning: Under the constitution, elections must be held 120 days (four months) before the expiry of the presidential term. El Sisi’s current term expires in April.

Schools are hiking fees beyond the caps, and parents aren’t happy: El Hadidi dedicated part of last night’s show to criticizing international and private schools that are hiking tuition fees for the coming school year above the Education Ministry’s new caps (watch, runtime: 6:25). Many schools are reportedly raising fees by as much as 40%, despite the ministry’s new tiered system permitting a maximum hike of 25% for schools with the cheapest fees. El Hadidi called out the Education Ministry for not enforcing the rules, and touched on the large amounts families are spending on school supplies amid soaring prices.

Background: The Education Ministry recently imposed new caps on fee hikes, allowing schools to raise fees by 7-25% depending on the cost of tuition. Exceptions to the rule can be made if the school can prove it’s suffering losses, with the ministry reportedly approving hikes of up to 60. Schools regulated by the ministry need approval before announcing hikes.

Also on the airwaves last night:

  • El Sisi x MBZ: El Sisi's visit to the UAE for talks with Sheikh Mohamed bin Zayed Al Nahyan got blanket coverage on the airwaves: Masaa DMC (watch, runtime: 2:15), Al Hayah Al Youm (* watch, runtime: 6:11), Ala Masouleety watch, runtime: 2:34), and Kelma Akhira (watch, runtime: 1:16). We have more on the talks in diplomacy, below.
  • Madinet Masr’s Abdallah Sallam got screen time: Madinet Masr CEO Abdallah Sallam joined Amr Adib in the El Hekaya studio to discuss the company’s expansion plans and the state of the real estate sector(watch, runtime: 2:26 | 4:13 | 1:33).
  • Social support measures: Masaa DMC was still beating the drum on the new wage and pension hikes announced earlier this week (watch, runtime: 14:09).
Tags:

This publication is proudly sponsored by

7

Also on our Radar

Fertiglobe, AD Ports sign non-binding agreement for storing ammonia, urea in Egypt’s ports. PLUS: Network International and eCards are collaborating on digital cards

LOGISTICS–

Fertiglobe is laying the groundwork to increase ammonia, urea exports from Egypt: MENA fertilizers firm Fertiglobe — a JV between Adnoc and the Sawiris-owned OCI —signed a non-binding MoU with Abu Dhabi Ports to explore opportunities for storing and shipping urea and ammonia at ports in Egypt and the UAE, it said in a statement (pdf) on Monday. The partnership also aims to enable Fertiglobe to ship and store green ammonia.

Fertiglobe will soon be producing green ammonia in Egypt: The company is working with Orascom Construction and Scatec to establish Egypt’s first-ever green hydrogen plant. Powered by solar and wind energy, the plant will send around 15k metric tons of hydrogen a year which will be used as feedstock to produce 90k metric tons of ammonia annually at Fertiglobe’s existing facility.

ICYMI– The ADQ-owned company has been pushing aggressively into Egypt’s maritime logistics industry. Under an agreement signed earlier this year, AD Ports was granted wider access to terminals and logistics facilities at a number of Egypt’s key ports — including Ain Sokhna, Port Said and Safaga — and signed a 30-year concession agreement to develop and operate a container terminal at Safaga Port. It has also been reported to be interested in acquiring controlling stakes in the state-owned operators of the Port Said and Damietta container terminals.

FINTECH -

eCards x Network International : E-Finance’s digital cards subsidiary eCards and Dubai-based fintech firm Network International have signed an agreement to join forces to expand smart banking card services in the Middle East and Africa, the state-owned fintech player said in a bourse filing (pd f) yesterday. The collaboration will see eCards handling the production and customization of the cards, while Network will oversee card processing, according to the statement.

Remember: Network International last month announced plans to invest EGP 1 bn in expanding its POS network in Egypt and rolling out its newly launched payment platform Network One.

Tags:
8

PLANET FINANCE

Oman’s OQ sets price range for IPO of gas pipeline unit

OQ receives green light for what could be Oman’s biggest-ever IPO: Omani state-owned energy giant OQ has set the price range for the upcoming IPO of its gas pipelines business, which could raise OMR 297 mn (USD 771 mn). The company priced OQ Gas Networks’ shares at a range of 131-140 baisas apiece, according to a statement on Sunday from the company’s capital markets regulator, which approved the IPO prospectus. OQ will sell some 2.12 bn shares to investors in the IPO, equivalent to 49% of the company.

What’s next: The subscription is set to commence on 26 September for institutional and retail investors.

Background: The company announced its intention to list on the Muscat Stock Exchange earlier this month. Our friends at EFG UAE are acting as joint global coordinators along with Bank Muscat and BofA Securities. Bank Muscat is the issue manager.

ALSO GETTING COVERAGE-

#1- Tesla to build EV factory in Saudi? Saudi Arabia is reportedly in early stage talks with EV giant Tesla to build a factory in the country, the Wall Street Journal reported on Monday, citing sources close to the matter. The newspaper claims that the kingdom is trying to attract the company by offering access to metals and minerals.

Don’t expect much to come of this: “Yet another utterly false article from WSJ,” Tesla boss Elon Musk wrote on X(formerly known as Twitter).

It’s looking more likely that Turkey could get a Tesla factory: Turkish president Recep Tayyip Erdogan is also trying to court the tech bn’aire, and asked him to set up a Tesla factory in Turkey during talks in New York, Reuters reported yesterday, citing the country's communications directorate.

#2- Evergrande shares plunge 25% after detention of wealth management staff: Shares in defaulted Chinese real-estate developer Evergrande tumbled as much as 25% yesterday after Chinese police detained some staff of the company’s wealth management unit. The company has been at the epicenter of a growing crisis in the country’s property sector, sparked in 2021 when it defaulted on more than USD 300 bn of debt. The police have not yet announced what the detained staff are charged with. (Reuters | Bloomberg)

EGX30

19,752

+0.4% (YTD: +35.3%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,036

-0.6% (YTD: +5.3%)

ADX

9,817

-0.6% (YTD: -3.9%)

DFM

4,048

+0.1% (YTD: +21.4%)

S&P 500

4,454

+0.1% (YTD: +16.0%)

FTSE 100

7,653

-0.8% (YTD: +2.7%)

Euro Stoxx 50

4,246

-1.1% (YTD: +12.9%)

Brent crude

USD 94.71

+0.8%

Natural gas (Nymex)

USD 2.72

+3.0%

Gold

USD 1,955.00

+0.5%

BTC

USD 26,768

+1.2% (YTD: +62.0%)

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 2.5 bn (17.8% above the 90-day average). Foreign investors were net buyers. The index is up 35.3% YTD.

In the green: Mopco (+6.1%), Orascom Development Egypt (+2.5%) and Alexandria Containers and Cargo Handling (+2.3%).

In the red: Qalaa Holding (-2.1%), Talaat Moustafa Group (-1.8%) and Sidi Kerir Petrochemicals (-1.5%).

Markets across Asia are in the red this morning, while stocks in the US and Europe are on course to fall later today, according to equity futures.

Tags:
9

Diplomacy

Egyptian, UAE leaders talk economic, investment ties

Sisi x MBZ: President Abdel Fattah El Sisi was in Abu Dhabi yesterday for talks with UAE president and ruler of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan. The two leaders economic, trade and investment ties as well as regional and international developments, according to readouts from Ittihadiya and Abu Dhabi.

Remember: The UAE is a critical partner for Egypt to exit its FX crisis. The UAE is among the Gulf countries Egypt is counting on to purchase state assets and help pull it out of its economic crisis. Abu Dhabi wealth fund ADQ has been the most active Gulf investor since the crisis began last year, investing USD 1.8 bn in a number of EGX-listed companies in April and agreeing this year to acquire minority stakes in three state-owned firms — Egyptian Ethylene and Derivatives Company, Egyptian Linear Alkyl Benzene, and Egyptian Drilling Company — for USD 800 mn.

The government wants to close this transaction asap: The government is hoping to sign final contracts with ADQ by the end of the month.

Shoukry at the UN: Foreign Minister Sameh Shoukry is doing the rounds at the United Nations General Assembly in New York city this week, where he participated in bilateral talks, summits, and ministerial meetings focused on Egypt’s foreign policy and sustainable development priorities.

  • The minister met with British foreign secretary James Cleverly to discuss boosting economic and investment ties, and preparations for the Egypt-UK Partnership Council. (Foreign Ministry)
  • Shoukry and Planning Minister Hala El Said both spoke at the SustainableDevelopment Goals Summit. The foreign minister used his speech to call on developed countries to fulfill their commitments and support green growth and climate finance, while El Said delivered an address about digital public infrastructure. (Foreign Ministry | Planning Ministry)
  • The foreign minister attended a meeting focused on restarting the peace process between Palestine and Israel. Saudi Arabia, Jordan, the Arab League and the EU were also in attendance. (Foreign Ministry)
Tags:

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

Published every Tuesday in EnterpriseAM.

Read going Green
10

Going Green

Is Egypt still a leader in the region’s green transition?

MENA is undergoing a green energy boom: The region has operationalized some 6.9 GW of solar and wind capacity since May 2022, increasing the region’s solar and wind power production 57% to 19 GW, according to a report (pdf) by US-based clean-energy think tank Global Energy Monitor. With 9 GW of renewables projects slated for completion by the end of 2024, that capacity is expected to increase again by around 50% next year.

The capacity of solar and wind projects in the pipeline jumped 400% y-o-y: MENA has nearly 361 GW worth of prospective solar and wind projects on the way, an increase of 292 GW on the year before, according to the think tank. That’s more than the total prospective capacity of the US and Canada combined. However, just 6% of this proposed capacity is under construction, while 47% is in pre-construction — i.e. they have secured financing, government permitting, land rights, or formal power purchase agreements. The remainder of the prospective capacity is wrapped up in announced projects, which often don’t end up seeing the light of day.

Wind farms have been eclipsed by solar projects: A whopping 97.1% of the region’s capacity operationalized since May 2022 is solar capacity, with wind continuing to be underutilized in the region despite the resource’s strong potential in nearly all countries. Only Mauritania and Morocco have grown their operating wind capacity during the period, bringing online a combined 226 MW.

But is Egypt falling behind in the region’s green transition? The UAE has more than doubled its operating utility-scale solar and wind capacity to 5.6 GW between May 2022 and May 2023, overtaking Egypt as the MENA region’s best performer in that metric, according to Global Energy Monitor. We’re now in second place with local utility-scale projects generating a total of around 3.7 GW, up only 5.9% from May last year. Alongside Oman and Morocco, the UAE has emerged as one of the “potential renewable leaders in the region,” the NGO writes.

We were also pushed out from first place for prospective solar + wind energy: Egypt was also surpassed in prospective capacity — capacity from projects that are either announced or being built — by Oman, which grew its prospective utility-scale solar and wind capacity more than fivefold to 83 GW since May 2022. Egypt currently has a prospective capacity of 69.2 GW, of which 95.2% was penciled in during the past year.

We knew the winds of change were coming: Global Energy Monitor last year predicted that we could lose our top spot as the Arab League pursues an ambitious plan to push regional renewable energy capacity to 80 GW by 2030.

Yes, but: Despite progress, the region is still “light years from dethroning oil and gas,” says Kasandra O'Malia, project manager at Global Energy Monitor. Some 90% of the region’s electricity comes from oil and gas. It would take roughly 500 GW of additional solar and wind power — 26 times the current capacity — to replace the region’s 343-GW oil and gas plants. Additionally, 18 of the 23 countries examined in the report still plan to bring online more oil and gas plants.

Most of MENA’s prospective renewable energy won’t go towards decarbonizing our electricity grids: Some 60% of the region’s prospective renewable energy is earmarked for export as green hydrogen, meaning it won’t help the region’s national electricity grids transition away from fossil fuels.

All things considered, we’re behind our global peers: To put things into perspective, South America — whose population and GDP are similar to the region’s — has operationalized more than four times the capacity that MENA did in the past year, adding some 32 GW to its solar and wind energy capacity.

But financial incentives could catalyze the region’s green transition: The region has set global records for the lowest levelized cost of energy (LCOE) for solar and wind projects. The declining cost of renewables could discourage the construction of new oil and gas power plants and expose existing fossil fuel plants to the risk of becoming stranded assets.

Gulf sovereign wealth funds are also investing big in solar and wind — including here: Saudi Arabia’s Public investment fund and Abu Dhabi’s Mubadala have been leading the charge with investments in over 46 GW of renewable capacity abroad, 22% of which is earmarked for Egypt. Saudi Arabia’s ACWA Power and the UAE’s Masdar-led consortium both secured land in Sohag for 10-GW wind projects in the past two months. Acwa Power is also reportedly eyeing up a tender for five solar power plants on the North Coast and in April secured USD 114 mn in backing from a consortium of international lenders for a 200 MW solar power plant in Kom Ombo.

Your top green economy stories for the week:

  • Maersk’s new green fuels venture eyes Suez Canal production hub: Danish shipping giant AP Moller-Maersk and its parent company AP Moller Holding have established a startup that will manufacture green methanol to fuel container ships in the Suez Canal Economic Zone.
  • Arab, Chinese companies could invest USD 600 mn in Egypt wind plants: Three unnamed firms hailing from the Arab world and China are looking to invest USD 600 mn to build wind farms in Egypt.
  • Five investors interested in Gabal El Zeit: The government has received five offers from investors interested in acquiring the 580-MW Gabal El Zeit wind farm, Planning Minister Hala El Said said last week.
Tags:

CALENDAR

SEPTEMBER

17-19 September (Sunday-Tuesday): Sharm Rendezvous (insurance conference), Rixos Premium Seagate, Sharm El Sheikh.

18-19 September (Monday-Tuesday): Enterprise Finance Forum, St. Regis Hotel, Cairo.

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

19-26 September (Tuesday-Tuesday): UN General Assembly, New York.

20-23 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

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

23-29 September (Saturday-Friday): Engineering Export Council of Egypt Iraqi trade mission.

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.

25-26 September (Monday-Tuesday): Egypt to host the Asian Infrastructure Investment Bank’s annual board meeting, Sharm El Sheikh.

27 September (Wednesday): Prophet Muhammad’s birthday.

26 September (Tuesday): Taqa Arabia’s ordinary general assembly meeting.

27 September (Wednesday): Deadline for bidding in the fifth phase of the investment map offered by the Industrial Development Authority (IDA).

27 September (Wednesday): Deadline for bidding in tender for five solar plants on north coast.

28 September (Thursday): Eastern Company will hold an ordinary general assembly meeting to approve the company’s financials for the 2022-2023 FY.

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

28-29 September (Thursday-Friday): Medical Tourism Conference, Sharm El Sheikh.

30 September (Saturday): The start of the new academic year for Egyptian universities.

30 September (Saturday): The start of the new academic year for Egyptian schools.

Signposted to happen sometime in September:

  • Sustainable Debt Coalition Initiative agreed at COP27 to launch
  • IDH to open first branch in Saudi Arabia
  • The Egypt-Germany trade and investment joint conference in Cairo
  • ADQ to acquire stakes in Elab, Ethydco and EDC by end of month

OCTOBER

1-3 October (Sunday-Tuesday) International Expotec for water economics management, Egypt International Exhibition Center, Fifth Settlement, Cairo.

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

2 October (Monday): Government meeting with investors to look into liberalizing electricity grid.

6 October (Friday): Armed Forces Day.

7 October (Saturday): HHD shareholders to consider NOSI’s offer to acquire Heliopark land.

9 October (Monday): The Narrative PR Summit, Somabay Red Sea.

9-11 October (Monday-Wednesday): Arabs Savings and Financial Literacy Conference, Four Seasons Hotel.

10-12 October ( Tuesday-Thursday) Ceramica Expo, Cairo International Convention Center.

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

Late October-14 November: 3Q2023 earnings season.

15-17 October (Sunday-Tuesday): Egypt Automotive Aftermarket Exhibition, Cairo International Convention Center.

26 October (Thursday): Daylight saving time ends.

29-31 October (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center.

29 October - 2 November (Sunday- Thursday): Cairo Water Week.

30-31 October (Monday-Tuesday): Intelligent Cities Exhibition and Conference, Dusit Thani LakeView, Cairo.

30-31 October (Monday-Tuesday): Global Business School Network (GBSN), American University of Cairo.

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

Signposted to happen some time in October:

  • Deadline for ins. providers to link their databases with the FRA
  • Egyptian-Jordanian Business Council, Amman, Jordan
  • Gov’t expects to finalize sale of Gabal El Zeit wind plant
  • October or November: Gov’t expects to finalize stake sale for military-owned fuel retailer Wataniya

NOVEMBER

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

8 November (Wednesday): Turkish-Arab Economic Forum 2023, Istanbul.

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo.

14-15 November (Tuesday-Wednesday): Destination Africa, Royal Maxim Palace Kempinski Hotel.

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

19-22 November (Sunday-Wednesday): Cairo ICT, Egypt International Exhibition Center.

22 November (Wednesday): Deadline to apply to FRA for credit rating license.

23 November (Thursday): Worldview Education Fair, Cairo. (Register here)

30 November-12 December (Thursday-Tuesday): COP28, Dubai.

DECEMBER

9-15 December (Saturday-Friday) :The Engineering Export Council of Egypt’strade mission to Saudi Arabia.

10-11 December (Sunday-Monday): eGlobe Expo, St. Regis Almasa Hotel, Cairo.

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

12-14 December (Tuesday-Thursday): Food Africa Expo, Egypt International Exhibition Center.

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

Signposted to happen sometime in December:

  • Gov’t expects to finalize sale of a stake in military-owned bottled drinks company Safi
  • Gov’t expects to finalize sale of Zafarana wind farm

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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.

3Q 2023: E-Finance to launch in Saudi Arabia.

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

4Q 2023: EGX to launch a shariah-compliant index.

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

2024: Standard Chartered Bank to open a branch in Egypt.

June 2024: Gov’t expects to finalize sale of Beni Suef combined-cycle power plant.

1H 2024: Gov’t expects to finalize sale of four water desalination plants.

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

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

2Q 2025: Safaga Terminal 2 to start operations.

Now Playing
Now Playing
00:00
00:00