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Tuesday, 9 May 2023

What We're Tracking Today
M&a Watch
Budget Watch
Infrastructure
Startup Watch
Startup Watch
War Watch
Moves
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Going Green
Calendar

SFE buys 49% of El Ezaby, launches pharma logistics firm with B Investments

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Today at a glance

1

M&A WATCH

 SFE buys 49% of El Ezaby, launches pharma logistics firm with B Investments.
2

BUDGET WATCH

 FinMin says budget deficit to widen to 8% this year as it prepares to unveil spending plans.
3

What We're Tracking Today

 Offers for Safi + Wataniya coming this month, cabinet says.
4

What We're Tracking Today

 No offers yet for Ezz Dekheila Steel -Ezz Steel.
5

What We're Tracking Today

 We’re six days away from the Enterprise Exports & FDI Forum.
6

Infrastructure

 Khazna Data Centers + Benya to build USD 250 mn hyperscale data center in Cairo.
7

Startup watch

 Orascom Investment Holding becomes strategic investor in light EV company BluEV.
8

Startup watch

 Balad closes seven-figure USD pre-seed round led by Acasia Ventures.
9

WAR WATCH

 Saudi officials aren’t confident about a Sudan ceasefire pact.
10

What We're Tracking Today

 Egypt + Iran are reportedly in talks to restore diplomatic ties.
11

Going Green

 Are small reactors the future of nuclear energy?

Tuesday, 9 May 2023

What We're Tracking Today
M&a Watch
Budget Watch
Infrastructure
Startup Watch
Startup Watch
War Watch
Moves
Last Night’s Talk Shows
Also On Our Radar
Planet Finance
Going Green
Calendar
1

What We're Tracking Today

Offers for Safi + Wataniya coming this month, says Egypt

Happy hump day, dear readers: We have another packed issue for you this morning, with new budget figures out ahead of Finance Minister Mohamed Maait’s statement to MPs today, a handful of M&A and investment announcements, and good / bad news on the regional diplomacy front.

But before we get to that…

We’re only six days away from meeting with some of you at the Enterprise Exports and FDI Forum, taking place at the Four Seasons at the Nile Plaza on Monday, 15 May.

We’re proud to announce that our friend Mohamed Talaat Khalifa, CEO of Concrete is joining us for the forum. Are you? Mohamed Talaat Khalifa will be speaking on how he was able to grow his company’s exports. He is joined on stage for that discussion by Tarek Hosny, head of investments and projects at Fertiglobe, who’ll tell us what needs to be done to put Egyptian goods on the global map.

Stay tuned tomorrow for more names…

They’re not the only ones: Among the top execs, bankers, and development finance folks speaking at the conference are: Tarek Kamel, CEO of Nestle Egypt; Omar Elsahy, general manager of Amazon Egypt, Khaled Morsy, CEO of DB Schenker Egypt; Mark Wylie, CEO of Beyti; Hassan Massoud, associate director and head of private equity (Southern Mediterranean) at the EBRD; Hossam Abou Moussa, partner at Apis; Yassir Zouaoui, partner at McKinsey; Shady William, managing director of IDG; Hossam Sallab, CEO and vice-chairman, Sallab Group and Royal Ceramica; Abdallah Sallam, CEO of Madinet Masr; Kareem Abou Ghaly, chairman and CEO of Pasta Regina; Helmi Ghazi, deputy CEO of HSBC Egypt; Nadia El-Tawil, investment officer at AfricInvest; Mostafa Bedair, CEO of Giza Seeds and Herbs; Nada El Ahwal, CSO of Transmar; and Mohamed El Gebely, team leader at USAID Trade.

Topics and live interviews will include:

  • Why exports and FDI are the way forward and what lessons have worked from around the world;
  • How to attract foreign partners and figure out what they are looking for;
  • What are the fundamentals to creating an export and / or FDI strategy;
  • What it takes to secure a place in a multinational’s supply chain.
  • How industrial clusters could expedite exports, FDI and possibly be an avenue for SME development;
  • What are the industries of tomorrow around which we can export and bring in FDI.

Tap or click here to explore the full agenda.

** Have you confirmed your attendance? Invitations have been sent out over the past few weeks. If you have yet to confirm your attendance and would still like to join us, please reply to the invitation with an RSVP.

WHAT THE GOV’T WANTS THE MARKET TO KNOW THIS MORNING: The privatization program is alive and kicking.

#1- We can expect to see offers coming this month for stakes in two military-owned companies: Bottled drinks firm Safi and fuel retailer Wataniya will start receiving offers from strategic investors this month, the Madbouly cabinet said in a statementyesterday. Major local-international consortiums have voiced interest in the companies, he said, without providing further details.

Remember: The Sovereign Fund of Egypt is reportedly looking to sell at least 10% — and potentially up to 100% — of the two firms to strategic investors.

CI Capital has been promoting the companies for almost two months: The investment bank reportedly kicked off a roadshow in mid-March. Little is known about who it has been in talks with or the level of appetite.

#2- Other undisclosed things are happening: The state is currently finalizing a number of agreements with unnamed buyers, Prime Minister Moustafa Madbouly said, without providing details. The PM reiterated the government’s commitment to the privatization agenda, and said that details of these transactions will be announced soon.

Remember: The government wants to raise USD 2 bn from selling state-owned assets by the end of June, and is aiming to offload stakes in at least 32 companies by March 2024.

32 becomes 33? The government has added El Nasr Company for Intermediate Chemicals to its list of companies earmarked for privatization. It joins the government’s 545-MW wind farm facility in Zafarana to be offered to investors, cabinet said yesterday.

AND- Arab League to weigh in? The Arab League’s economic council is calling on its agencies to establish funds to purchase Egyptian state-owned assets, Al Borsa reported yesterday, citing the council’s secretary-general economic affairs advisor.

The statement comes after the international community has criticized us for not moving faster on privatization and reforms given the ongoing FX crunch, including (Fitch Ratings | S&P Global | Moody’s) and investment banks (Morgan Stanley | JPMorgan).

ALSO- Lamees El Hadidy — the queen of late night talk and a knowledgeable commentator on business and economy issues — pushed cabinet on air last night to accelerate the privatization process. We have the details in Last Night’s Talk Shows, below.

WATCH THIS SPACE- Private-sector players are preparing to sell up to USD 200 mn in green bonds, the Planning Ministry said yesterday. The ministry didn’t disclose the issuers or give an indication of when the sales will take place.

Egypt pioneered green bonds in the MENA region, becoming the first sovereign to sell the climate-linked securities back in 2020. A few months later CIB launched the country’s debut corporate green bond issuance.

No offers yet for Ezz Dekheila Steel -Ezz Steel: Steel giant Ezz Steel has not made any offers to acquire additional shares in its subsidiary Ezz Dekheila Steel, it said in an EGX disclosure (pdf), following reports in the local media this week that it is in talks with two state-owned banks to acquire their combined 14% stake in the EGX-listed subsidiary. Ezz Dekheila Steel said that none of its shareholders have notified it of a potential stake sale in a separate disclosure (pdf).

PSA- CIB has discontinued its three-year,18-20% annual-rate certificates, replacing them with 19-17% certificates, according to its website. Savers will need to deposit a minimum of EGP 5 mn to lock in the 19% rate, EGP 2 mn for 18%, EGP 500k for 17.5%, and EGP 50k for 17%. Interest payouts are monthly.

HAPPENING TODAY-

It’s budget day at the House: Finance Minister Mohamed Maait and Planning Minister Hala El Said will deliver statements in the House for the draft FY 2023-2024 budget. We have more on what to expect from the budget in this morning’s Budget Watch, below.

UN sustainability agreement: The Madbouly government and the UN will ink the UN Sustainable Development Cooperation Framework for 2023-2027, according to MENA. The framework will guide the implementation of UN projects in Egypt over the next four years.

The Swedish embassy is hosting an event in Cairo on the prospect of hooking our electricity grid up to Europe’s, paving the way for significant energy exports.International Cooperation Minister Rania Al Mashat, Oil Minister Tarek El Molla, and representatives from the key private-sector infrastructure players working on Mediterranean energy projects will take part in panel discussions. The European Investment Bank and Alexbank will ink an undisclosed contract during the event.

SOUND SMART- There are as many as five proposed interconnector projects that would link our electricity grid to mainland Europe. Read about them all here.

Want to know how blended finance can promote inclusive development? That’s the subject of the Egyptian National Competitiveness Council and Creative Associates International’s conference today at the Conrad Hotel. The one-day event will bring together experts, policy makers and stakeholders for discussions on how a combination of public and private sector resources can boost growth across various sectors. Register your attendance here.

HAPPENING TOMORROW-

Tomorrow’s inflation print could remind us that inflation rates can, actually, go down: That’s according to a Reuters poll of analysts, whose median forecast is for headline inflation to fall to 31% from 32.7% in March.

What to thank: A “favorable base effect, a steady currency, and weaker commodity prices,” the newswire says.

It has been a while since we’ve known anything other than unrelenting inflation: Headline CPI has risen for nine consecutive months, rising from 13.2% to near-record highs on the back of a series of heavy currency devaluations.

Yes, but: Inflation could rise in the coming months especially if the country pushes through with further EGP devaluations which would hike prices even higher, Capital Economics said.

HAPPENING NEXT WEEK-

Car import scheme wraps up: The expat car import initiative will draw to a close on 14 May. The scheme was initially scheduled to end in mid-February but was extended for another three months in a bid to maximize FX inflows.

The latest tally: The Finance Ministry has now raised USD 713 mn from the scheme, up from USD 500 mn in mid-April, it said in a statement yesterday. That’s a little over a quarter of the USD 2.5 bn originally targeted by the ministry.

Endeavor Egypt is celebrating its 15th birthday at the GEM next week: The startup network heads to the Grand Egyptian Museum (GEM) next Friday, 19 May, to mark its 15th anniversary. 

THE REALIGNMENT-

Egypt-Iran normalization next? Egypt and Iran have been in discussions over normalizingrelations since March, officials from both sides have reportedly told the National. The latest meeting took place at the weekend, Egyptian officials said.

The Iranians said as much in March: Speaking a few days after their breakthrough agreementto restore ties with Saudi Arabia, the country’s foreign ministry spokesperson spoke of the need to improve relations with Egypt. A few weeks later Cairo began allowing Iranians to get an entry visa on arrival in South Sinai.

Iraq as mediator: An Iraqi diplomat said two rounds of talks were held in Baghdad in March and April. “Both sides are putting out feelers and they are willing to move forward. There is no headway until now,” an Iraqi diplomat said.

El-Sisi-Raisi meeting soon? The two sides are looking into potentially setting up a meeting between President Abdel Fattah El Sisi and his Iranian counterpart Ebrahim Raisi, the sources told the news outlet.

*** 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.

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The TriFactory's Somabay Endurance Festival returns for the fifth time from 25-27 May, bringing together Egypt's multi-sport community for an amazing weekend filled with swimming, cycling, and running throughout the beautiful scenery of Somabay. Select from six different races, SIGN UP NOW, and get ready to Experience Endurance!

2

M&A WATCH

Egypt’s sovereign fund buys 49% of El Ezaby, launches pharma logistics firm with B Investments

The Sovereign Fund of Egypt (SFE) has acquired a 49% stake in leading pharma chain El Ezaby Pharmacy, El Ezaby Chairman Ahmed El Ezaby said in a televised interview last night. The investment will enable the company to roughly double its branch count to 600, he told El Hekaya’s Amr Adib (watch, runtime: 7:28), without disclosing the size of the SFE’s investment.

The company turned down several offers from other sovereign wealth funds, he added.

Meet EZ International: The SFE’s healthcare sub fund and private equity firm B Investments are setting up a pharma logistics and distribution firm in partnership with El Ezaby, according to a joint press release (pdf).

A one-stop shop for the pharma industry: EZ International will offer everything from logistics and administrative support to trade and distribution services to local pharma companies, according to the statement. It will first roll out to El Ezaby’s 250+ branches nationwide before expanding to another 250 local pharmacies.

Financial + ownership details TBC:The statement didn’t disclose the size of the partners’ initial investments and respective stakes in the new venture, but said that the two “are moving ahead with a two-year capital increase plan” to support the new company. Representatives from SFE and B Investments didn’t respond to our inquiries when we reached out yesterday.

What they said: “We look forward to working together closely [with El Ezaby] to expand locally and regionally. Through this partnership, we offer independent pharmacies a new business model that supports their growth and business development.” said SFE head Ayman Soliman.

The SFE and B Investments are a public-private pharma power couple: The sovereign fund and B Investments in January agreed to together channel more than EGP 2 bn into local healthcare and pharma businesses. The PE firm’s board in March signed off on investing up to EGP 500 mn in the SFE’s sub-fund as part of the two agreements. The SFE is looking to draw an initial EGP 1.2 bn for the sub-fund, and hopes to raise additional capital down the line.

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3

BUDGET WATCH

Egypt says budget deficit to widen to 8% this year as it prepares to unveil spending plans

The government will record its widest budget deficit since FY 2018-2019 this yearas the economic crisis triggered by the war in Ukraine hits public finances. The deficit will widen to 8% of GDP in FY 2022-2023 from 6.1% the year, according to updated figures (pdf) in the FY 2023-2024 budget obtained by Enterprise yesterday. The government had initially targeted a 6.1% deficit in this year’s budget, which was revised to 6.8% in March.

The reason: Higher borrowing costs and increased spending to counter inflation. The government has increased public-sector wages, pensions and social protection measures in a bid to protect the most vulnerable households from soaring inflation. Meanwhile, sharply higher interest rates have significantly increased the government’s debt servicing costs. MPs approved EGP 165 bn of fresh borrowing in March to cover the additional costs.

Deficit to narrow next year: The Finance Ministry is now targeting a deficit of 7% in FY 2023-2024, according to the figures. The ministry had initially penciled in a 6.4% deficit in March. The forecast for the primary balance remains unchanged, with the ministry still predicting a 2.5% surplus next year, up from a projected 0.6% this year.

Revenue growth to outpace spending in FY 2023-2024:

  • Revenues to rise 41%: The ministry is targeting revenue of EGP 2.14 tn for the next fiscal year, up 41% from this year. This will be driven by a 31% increase in tax revenues which the ministry expects to record EGP 1.53 tn.
  • Spending up 34%: Spending for the upcoming fiscal year will see a 34% y-o-y increase to EGP 2.99 tn, according to the figures.
  • Interest is the single-biggest expenditure: The ministry expects to spend EGP 1.12 tn on debt service in the coming year, up 45% y-o-y. This accounts for 37% of the government’s total spend during the year.
  • Spend on wages, subsidies, investment all to increase: FY 2023-2024 will see increased spending on wages (15%), commodity purchases (11%), social support (25%), and public investment (56%).
  • As will spend on public services: Allocations to education will rise 19% to EGP 305.2 bn in FY 2023-2024 while health spending will increase 14% to EGP 111.2 bn.

We already know some of the proposed spending breakdown: The ministry plans to increase by 28% its spending on social safety programs and will raise food subsidy allocations by 20% to EGP 108 bn and fuel subsidy spend by 24% to EGP 35.9 bn. The ministry has penciled in oil prices of USD 85 per barrel for FY 2023-2024, up from USD 80 per barrel this fiscal year.

** We should get our first look at the full budget later today when Finance Minister Mohamed Maait and Planning Minister Hala El Said give statements to the House about the government’s spending plans.

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4

Infrastructure

UAE’s Khazna partners with Benya on hyperscale Egypt data center

Khazna + Benya partner on hyperscale data center: UAE-based Khazna DataCenters will establish Egypt’s first hyperscale data centerin partnership with local IT infrastructure firm Benya Group, according to a statement.The two companies signed a term sheet agreement to establish the USD 250 mn center as well as an MoU with the government’s Maadi Technology Park, where the project will be built. Details about funding sources for the project were not disclosed.

The project: The project will have an initial capacity of 25-MW and the two firms plan to double that at a later date, Benya said in a statement shared with Enterprise, without providing further details. The companies plan to start construction later this year and complete the project in the next three years.

The players: Khazna was formed in late 2021 when Abu Dhabi’s G42 and a regional telecoms provider merged their data center businesses. Benya is an Egypt-based digital solutions and IT infrastructure provider that operates across the MENA region. It formed a JV last year with Saudi’s Al Fanar that will also work on data centers among other projects.

More to come: The two firms said they plan to eventually build a “series” of hyperscale data centers across the country.

REMEMBER- We’re keen on data centers: Egypt is well-positioned as a data center hub given our geographical location and the multiple subsea cables crossing our borders. Agility Logistics is planning a Cairo project as part of a string of African centers, while El Sewedy Data Centers and Emirati firm Gulf Data Hub plan to invest USD 2.1 bn to build three data center complexes here. For more on our data center landscape, read parts one, two, and three of our Hardhat series on the topic.

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5

Startup watch

Orascom Investment Holding becomes strategic investor in light EV company BluEV

OIH makes a play for the next-gen automotive sector: Orascom Investment Holding (OIH) has become a strategic investor in local e-mobility company BluEV after making an undisclosed investment, it said in astatement (pdf) yesterday. The partnership will enable the company to expand at home and abroad, accelerating the decarbonizing of light vehicles, the company said, without disclosing details of the agreement. Representatives of OIH and BluEV declined to comment on the transaction when we reached out yesterday.

Decarbonizing light vehicles: Founded by Mahmoud El Guezery (LinkedIn), Rida Baalbaki (LinkedIn), Bilal Chaabi (LinkedIn) and Ahmed Sharafeddine in March 2022, BluEV has pioneered the mobility-as-a-service (MaaS) model for electric light vehicles in Egypt. It operates a network of lithium-ion battery swapping stations for two- and three-wheeled electric vehicles, allowing users to replace drained batteries with fully-charged ones. Through the company, users can purchase new light electric vehicles or swap out their petrol engines for batteries.

What they said: BluEV has come up with a “viable practical solution” to phasing out gasoline-fuelled light vehicles in Egypt, OIH Executive Chairman Naguib Sawiris said. “The model is very similar to the commercial model of mobile phone operations, where we have massive expertise. This makes us confident that we can excel in this business model in Egypt and the region.”

Plans to expand: “[OIH’s] legacy and experience make them the perfect partner to help BluEV become the global player of MaaS, born in Egypt and grown through Africa, Europe and beyond,” said Baalbaki, BluEV’s CEO.

KHATER JOINS BLUEV AS CISO-

BlueEV has also brought investment banking veteran Tarek Khater on board as chief investment and strategy officer. Khater (LinkedIn) joins from Beltone, where he was most recently director in the investment banking division. He is a veteran of HSBC, Hassan Allam Utilities and Evolve Investment Holding.

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6

Startup watch

Egyptian fintech Balad closes seven-figure USD pre-seed round

Balad completes first funding round: Egyptian VC firm Acasia Ventures led a seven-figure USD pre-seed investment round in fintech startup Balad, according to a press release (pdf). Other investors in the round included Launch Africa, Future Africa, V&R, Magic Fund, First Circle, Sunny Side and several MENA-region family offices.

Making it easier to send cash home: Founded last year by Adham Azzam (LinkedIn), Sally Asaad (LinkedIn) and Mohamed Assem (LinkedIn), the Cairo-based startup provides remittance-focused financial services for expats and their families. Individuals can buy Balad prepaid cards to complete instant delivery of inward remittances and receive reduced transfer fees.

We don’t have details on the funds yet: Acasia Ventures declined to provide details as to their investment in Balad or the total raised in the funding round as the information is not yet public. The funds will be used to develop the company’s new remittance platform, integrate it with the company’s banking partner, and hire new recruits, the press release said.

Acasia has had a busy 2023: The VC has invested in Dubai-based digital banking platform Credable, Nigerian delivery platform Fez Delivery and Athens-based retail apparel swap startup Swaplanet.

FYI- Balad was one of seven Egyptian startups long-listed for the VivaTech’s 2023 AfricaTech awards, announced at the end of last month.

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7

WAR WATCH

Saudi officials aren’t confident about a Sudan ceasefire pact

Violence continues in Khartoum as talks stall: Clashes between the Sudanese army and the Rapid Support Forces (RSF) continued yesterday amid reports that ceasefire talks in Saudi Arabia are stalling. “A permanent ceasefire isn't on the table... every side believes it is capable of winning the battle,” a Saudi diplomat told AFP yesterday. Representatives from both sides have been in Jeddah since Saturday to take part in pre-negotiation talkssponsored by Saudi Arabia and the US.

RSF must leave Khartoum -Burhan: In an interview with Al Qahera News, the country’s de facto military leader Gen. Abdel Fattah Al Burhan said that the RSF will have to leave the capital in order for the military to agree to a ceasefire. “We want the talks to establish the foundations to put a stop to the fighting and result in the exit of the RSF militia from civilian areas … A ceasefire will have to be paired with the RSF’s exit from civilian areas — hospitals, service centers, gas stations,” he said (watch, runtime: 51:04).

Sudanese army will be defeated -RSF: The RSF said that it will carry on fighting to ensure “the defeat of the Sudanese Armed Forces (SAF) and its supporters — members of the former regime of dictator and military officer Omar Al Bashir.”

Egypt continues to take in refugees: Egypt has so far taken in 70k refugees from Sudan, with 65.1k Sudanese nationals and 4.9k other nationalities crossing the border, according to the latest UN data. The total refugee count has risen to 107k, almost 98.5k of whom are Sudanese nationals.

Shoukry in Chad: Foreign Minister Sameh Shoukry held talks with Chad’s president Mahamat Idriss Deby in N’Djamena yesterday, in a meeting that centered around the latest developments in Sudan and their joint efforts to help restore peace in the country, according to a Foreign Ministry statement. Shoukry was in Chad yesterday as part of a regional trip focused on the civil war in Sudan that will see him visit South Sudan as well.

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8

Moves

Citi appoints new head of North Africa, Levant and Central Asia

Banking group Citi has appointed Omar Hafeez (LinkedIn) as the head of its North Africa, Levant and Central Asia, based in Dubai, according to a press release. Hafeez has almost 20 years of banking experience with Citi, including leadership roles in Nigeria, New York and Pakistan and most recently as the head of the corporate banking business in Japan, the third-largest for Citi globally.

The move follows Citi’s restructuring of its Middle East and Africa operations into three divisions: Sub Saharan Africa, Middle East and Pakistan, and North Africa, Levant and Central Asia. Hafeez will oversee operations in Egypt, Algeria, Tunisia, Morocco, Jordan, Lebanon, Turkey, Kazakhstan and Israel.

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9

LAST NIGHT’S TALK SHOWS

Privatization, the Sudan crisis and the National Dialogue get airtime on Egypt’s talk shows

A busy night on the airwaves: The nation’s talking heads covered everything from the Madbouly government’s privatization program and gold prices to the latest in Sudan and the fast-approaching National Dialogue.

Lamees calls on gov’t to accelerate privatization:“Every delay comes with a price in this situation,” Kelma Akhira’s Lamees El Hadidi said (watch, runtime: 3:49) pointing to a number companies that have been talking about privatization for years — Banque du Caire, Safi and Wataniya — as well as the EGP-USD exchange rate. Egyptian Capital Market Association VP Ayman Sabry seconded El Hadidi’s concerns about the pace of reform: “There is a daily cost for the unattained USD … we keep delaying the transaction and then eventually accepting lower valuations because we end up selling out of necessity,” he said (watch, runtime: 5:34).

International credit rating agencies are not biased against Egypt, El Hadidi said in response to Finance Minister Mohamed Maait’s recent claims. The minister suggested earlier this week that Moody’s, Fitch Ratings’ and S&P Global’s negative actions on Egypt’s rating were motivated by prejudice.

It’s day 25 of the war in Sudan: Air strikes and fighting continues as talks between the Sudanese army and the Rapid Support Forces continue, Al Qahera News correspondent Mohamed Ibrahim told Kelma Akhira (watch, runtime: 6:13). Meanwhile, Ala Mas’ouleety’s Ahmed Moussa broadcast his evening from Chad, where he interviewed Foreign Minister Sameh Shoukry (watch, runtime: 5:15), and Higher Education Ministry spokesperson Adel Abdel Ghaffar joined Al Hayah Al Youm (watch, runtime: 6:22) to speak on the future of the Egyptian students who were studying in Sudan. Masa’a DMC (watch, runtime: 1:19) also had coverage.

The National Dialogue is upon us: The long-awaited National Dialogue kicks off next week after months of preparations and coordination.The dialogue’s board of trustees released a statement last night calling on participants to stay the course and avoid withdrawing from the proceedings. “The board doesn’t want anyone to withdraw their participation from the dialogue. They want [all members of society] to be present for the dialogue and listen to each other,” El Hadidi said (watch, runtime: 4:07). Meanwhile, journalist and dialogue board member Gamal El Keshki joined Al Hayah Al Youm to discuss next week’s schedule (watch, runtime: 15:51).

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10

Also on our Radar

Siemens, Giza Systems deliver mobile substations

ENERGY -

Siemens + Giza Systems are keeping the lights on at remote development projects:Siemens Energy and Giza Systems have delivered four mobile substations for the Egyptian Electricity Transmission Company over the past 10 months, the German company said in a press release yesterday. The temporary units will provide 200 MVW of power to development projects in remote areas until conventional substations are brought online, it said.

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11

PLANET FINANCE

Credit crunch could slow US growth, Federal Reserve warns

Tightening credit conditions have the Fed worried: The Federal Reserve has warned that the recent crisis in the US banking system poses a risk to economic growth as lenders grow more concerned about their balance sheets. In its latest financial stability report (pdf), the central bank said that banks could hold back on making loans due to the uncertainty, further tightening liquidity and raising borrowing costs further. “A sharp contraction in the availability of credit would drive up the cost of funding for businesses and households, potentially resulting in a slowdown in economic activity,” it wrote. Bloomberg and the Financial Times have more.

MEANWHILE- Drilling starts at Aphrodite: Chevron, Shell, and Israeli energy firm NewMed Energy have started drilling at Cyprus’ Aphrodite field, Reuters reports, citing a statement from NewMed. The field is thought to contain up to 129 bcm of gas, according to NewMed’s website. The appraisal well will confirm the reserves and will take three months to finish, the company said.

Egypt is expected to export Aphrodite gas: Egypt and Cyprus are in talks to construct apipeline linking the field to Egypt’s liquefaction facilities, allowing the gas to be exported as LNG.

EGX30

17,643

+2.4% (YTD: +20.9%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,256

0.0% (YTD: +7.4%)

ADX

9,691

-0.2% (YTD: -5.1%)

DFM

3,583

0.0% (YTD: +7.4%)

S&P 500

4,138

+0.1% (YTD: +7.8%)

FTSE 100

7,778

+1.0% (YTD: +4.4%)

Euro Stoxx 50

4,349

+0.2% (YTD: +14.6%)

Brent crude

USD 76.59

+1.7%

Natural gas (Nymex)

USD 2.24

+4.9%

Gold

USD 2,028.60

+0.2%

BTC

USD 27,459

-5.0% (YTD: +66.6%)

THE CLOSING BELL-

The EGX30 rose 2.4% at yesterday’s close on turnover of EGP 2.12 bn. Local investors were net buyers. The index is up 20.9% YTD.

In the green: Abu Qir Fertilizers (+9.4%), AMOC (+7.3%) and Qalaa Holdings (+5.6%).

In the red: Ibnsina Pharma (-2.3%), and Juhayna (-0.7%).

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

Published every Tuesday in EnterpriseAM.

Read going Green
12

Going Green

Will SMRs soon replace conventional nuclear reactors?

Small modular reactors are the latest innovation in nuclear energy — and they could one day make their way here. Local media last month reported than an American and a Russian firm are competing to build small nuclear reactors (SMRs) here and have held talks with the Nuclear Power Plants Authority on the potential projects, according to a local news outlet. So what are SMRs — and why are some hailing them as the successor to traditional nuclear power plants?

The flat-packs of nuclear reactors: SMRs are compact nuclear reactors that can generate up to 300 MW(e) per unit — around a third of the generating capacity of conventional nuclear reactors. The “modular” in the name refers to the fact that where traditional reactors have to be built from the ground up, SMR systems and parts can be produced in factories and then easily transported and assembled on site, per the International Atomic Energy Agency (IAEA).

Is smaller better? SMRs’ smaller scale and ease of assembly could bring benefits in terms of affordability, efficiency, and flexibility, the IAEA says. SMRs can be fitted in facilities where larger nuclear plants are not suitable. Their lower electricity output means SMRs can be linked to rural electrical grids that have fewer transmission lines or lower capacity, or used off-grid to power specific sites. Where the custom-built nature of conventional reactors brings high costs and long construction timelines, SMRs can be prefabricated and shipped direct to side — and added to as energy demand at any given site increases. Their size means that SMRs also pose fewer safety risks and require less refueling than conventional reactor, according to the IAEA.

SMRs could help speed up the transition away from coal: Countries including France, India, Poland, Romania, the UK, and the US are looking into fitting SMRs on or near the sites of decommissioned coal plants, according to the IAEA. Existing infrastructure at coal plants — including water storage, desalination, and wastewater treatment systems, compressed air systems, and cooling towers — can all be repurposed for SMRs, while supply chains for coal plants and SMRs are also similar, the agency notes. “We should accelerate SMR deployment and on the other the decommissioning of coal stations. To achieve those two goals, using existing coal sites to implement nuclear projects can facilitate this switch,” EDF’s Anne Falchi told the IAEA in a webinar last year.

They could also power green hydrogen plants: Small reactors could also replace fossil fuels in industrial processes — and could serve to power plants producing low-carbon energy carriers like biofuels and green hydrogen. US firm NuScale and Shell Global are in the early stages of developing an SMR-powered green hydrogen plant, per Energy Tech.

That could be relevant for us: The government is aggressively pursuing investment in our nascent green hydrogen sector, signing more than a dozen MoUs worth bns of USD with private firms for projects in recent months, with more in the pipeline.

SMR firms are looking to target emerging markets: NuScale and the UK’s Rolls-Royce Consortium are both targeting African and South American markets, where “less robust grid systems might not support the energy load of traditional large-scale reactors,” Yale360 reports.

HOLD UP- This all sounds great. But the SMR industry is still in its infancy, and there are some big caveats:

#1- The tech is still in its early stages: There are more than 80 SMR designs in development globally, according to the IAEA. But there are just five small reactors actually in operation so far: three in Russia, one in India, and one built by China and exported to Pakistan, per the World Nuclear Association. More SMRs are under construction or in the licensing stage in countries including China, Russia, USA, Canada, South Korea and Argentina, the IAEA says

#2- Regulation is not in place: Only one SMR design has so far received regulatory approval in the US and there is as of yet no consensus on how to regulate SMRs globally. The IAEA last year launched the Nuclear Harmonization and Standardization Initiative (NHSI). The two-track program will try to get governments to develop “common regulatory positions without compromising nuclear safety and national sovereignty,” while also encouraging industry players to create “standardized industrial approaches for SMR development, manufacturing, construction, and operations.” The hope is that shared regulation will make the rollout of SMR tech worldwide faster and cheaper.

#3- SMRs have some of the same drawbacks as their big siblings: The risk of a nuclear accident is reduced but not eliminated with SMRs — and smaller reactors still produce radioactive waste, for which we still have no permanent storage solutions. Those concerns have led critics to say that we’d be better off phasing out nuclear entirely in favor of other forms of renewables, as some countries already began to do in the wake of the 2011 Fukushima disaster, Yale360 reports.

Your top green economy stories for the week:

  • Scatec interconnector studies to go ahead: Ministers approved the signing of an MoU with Norwegian renewables developer Scatec to study a new 3-GW Egypt-Europe electricity interconnection project.
  • Renewables-powered desalination: The Sovereign Fund of Egypt prequalified 17consortiums to bid in upcoming tenders for renewables-powered desalination plants, according to a statement.
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CALENDAR

APRIL

Late April – 15 May: 1Q2023 earnings season.

MAY

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

9 May (Tuesday): House back in session.

9 May (Tuesday): Europe-Egypt Energy Interconnectivity Event, Swedish embassy, Cairo.

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

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

13 May (Saturday): Transport Ministry’s Maritime Transport Sector is hosting its Excellence and Creativity conference in Alexandria.

14 May (Sunday): First National Dialogue session.

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 May (Tuesday): National Dialogue session.

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): National Dialogue session.

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.

21 May (Sunday): Senate to reconvene.

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.

19-20 June (Monday-Tuesday): The forum for insolvency reforms and corporate restructuring in the Middle East and North Africa.

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.

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