The rest of the Ras El Hekma funds roll in

Tuesday, 14 May 2024

The rest of the Ras El Hekma funds roll in

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Today at a glance

INVESTMENT WATCH

Second USD 20 bn tranche of Ras El Hekma funds land in state coffers.

ALSO ON OUR RADAR

SEIC to conduct due diligence on CIRA ahead of acquisition plans.

Healthcare

Local players are setting up a USD 100 mn healthcare venture.

WHAT WE’RE TRACKING TODAY

The SFE is heading to the Gulf.

WHAT WE’RE TRACKING TODAY

Fresh high-yield CDs enter the market.

EARNINGS WATCH

Fawry’s bottomline jumped 150% y-o-y in 1Q 2024.

PLANET FINANCE

Memelord Roaring Kitty is back — and GameStop shorts are feeling the pinch.

Going Green

What’s being done to make Egypt a hub for green data centers?

WHAT WE’RE TRACKING TODAY

The Sovereign Fund of Egypt is heading to the Gulf

Good morning, friends. It’s another quiet morning with the news lull extending into the middle of the week.

WATCH THIS SPACE-

#1- The Sovereign Fund of Egypt heads to the Gulf: The Sovereign Fund of Egypt will be touring the Gulf next month to drum up investment, Fund chair and Planning Minister Hala El Said told Asharq Business. The fund will meet with investors, financial institutions, and other sovereign funds to discuss potential investments on offer.

An industry sub-fund from the SFE? The Planning Ministry is looking into launching an industry-focused sub-fund under the SFE, El Said said. The ministry is working with the private sector to identify a number of potential industries for the fund, she said, highlighting the industrial sector’s importance for job creation and exports.

#2- Issuance of the one-year 27% yield CDs could be stopped soon: Banque Misr and the National Bank of Egypt (NBE) are considering stopping the issuance of one-year high-yield certificates of deposit (CDs) that were issued at the start of the year and replacing them with CDs with a lower return, Banque Misr President Mohamed El Etreby and an unnamed source from the NBE told Al Arabiya Business. Enterprise verified the news with El Etreby.

Remember: Banque Misr and the National Bank of Egypt introduced one-year CDs with yields up to 27% back in January.

Speaking of CDs: Banque Du Caire yesterday rolled out a new high yield three-year CD that pays a monthly variable return of 27%, the lender said.

ATTENTION, EGYPT INVESTORS-

Foreign investors are falling in love with Egypt again… Foreign investors we speak with (debt, equity, and strategic alike) have a growing appetite for Egypt. They’re buying into local debt, eyeing promising shares, and committing bns of USD to both new ventures here and the growth of their existing businesses. They like the Egypt story that’s taking shape after the float of the EGP, and its competitive advantages are clear to many of them: It’s a massive consumer opportunity and a regional export hub of tomorrow.

The Enterprise Optimism Forum 2024 will do exactly what it says on the tin: Spark conversations about a future that we think is much brighter than so many in our community feel right now. Think of it as much-needed shock therapy combined with an early, actionable roadmap for those of us who are “long Egypt.”

We’ll be talking with you about the agenda over the coming couple of weeks. It features speakers from Egypt and abroad who are future-proofing their businesses and angling to capture tomorrow’s opportunities — and who aren’t afraid to answer some tough questions.

*** Interested in attending? Tap or click here to let us know. Seating is limited.

PSA-

WEATHER- It’s another spring day in Cairo, with a high of 29°C and a low of 18°C, according to our favorite weather app.

It’s slightly cooler in Alexandria, with a high of 25°C and a low of 16°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Want to subscribe? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

HAPPENING TODAY-

#1- Foreign Minister Sameh Shoukry is in Bahrain for the Arab League ministerial meetings ahead of the 33rd Arab Summit — which will be held on Thursday — according to a ministry statement. The meeting will focus on draft resolutions to be submitted during the summit and several key issues, including developments in Gaza, Libya, and a number of other Arab countries.

#2- Get ready for the Green Growth Summit: Private sector players, financial institutions, investors, donors, and policymakers will gather today for the Green Growth Summit hosted by global development organization Hivos at Cairo’s Conrad Hotel. The summit will focus on green exports, de-risking green investments, green jobs, green ambassadors, and green impact investing. Registration for the event has already closed.

CIRCLE YOUR CALENDAR-

Egypt will host the joint annual meetings of Arab financial authorities for the first time on Wednesday, 22 May. The gathering will see finance ministers, central bank heads, and officials from regional and international bodies meet up in the new capital to discuss financial, economic, and development issues, according to a statement.

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

INFLATION WATCH-

Goldman Sachs adjusts inflation forecast: Goldman Sachs now sees inflation falling to 22% by the end of the year — up from its previous forecast of 20% — Arab World Press reports, citing a note from the bank. The lender pointed to the unexpected spike in the rate of inflation in February as the reason behind the upward revision.

DATA POINT-

The UAE has investments totalling USD 65 bn in Egypt, UAE International Investors Council secretary general Jamal Aljarwan told Asharq Business. Egypt is the UAE’s second-largest investment market after the US, Aljarwan added.

THE BIG STORY ABROAD-

It’s a really, really tech-heavy morning in the business press: Reviews are out for the iPad Air and iPad Pro models that Apple announced last week, ChatGPT maker OpenAI released a voice-assistant-like product that will chat with you in the (unauthorized, dystopian) voice of Scarlett Johansson in Her.

Up first: the Google I/O developer conference starts this morning. The Mountain View company is expected to announce (you guessed it) a new AI-powered voice assistant and a bunch of other Android goodies.

Consider it the prelude to a few very tech-heavy weeks: Microsoft’s Build conference runs next week (21-23 May) and could see Redmond announce an AI-powered search app based on ChatGPT, and then all eyes turn to Cupertino for Apple’s WWDC, at which the tech giant will unveil new versions of its various operating systems with plenty of AI baked in. Pundits will be watching to see how much of the AI goop Apple layers onto its OSes is homegrown and how much is licensed from ChatGPT or Google — it’s in talks with both.

Meet Her: OpenAI is actually calling it Chat-GPT4o (the letter ‘o’ at the end, not a zero) and it lit our X and Threads on fire for sounding exactly like Scarlett Johansson in Her, a movie in which a character falls in love with an AI voice assistant. You chat with GPT4o using your voice — and it can turn on your device’s camera to have a look around if it’s relevant to your ‘conversation.’ And unlike the current incarnation of Siri, it appears pretty seamless.

You can try it now for yourself: Head here to learn more or listen to a demo. If you already have a subscription to ChatGPT and have it running in a browser, do a hard refresh and then hit the dropdown menu on the top left to choose ChatGPT-4o.

The story is everywhere: The Verge | Financial Times | Wall Street Journal | Reuters | CNBC

You can already feel the ennui in this CNBC headline: AI may not replace you, but someone who uses it can — here’s the No. 1 skill you need to stay relevant.

ALSO IN AI- A UAE research institute has rolled out a new, open-source GenAI model named Falcon 2, it said in a statement yesterday. The institute says the model outperforms both Llama 3 from Meta as well as Google’s Gemma, which underpins the Gemini products. “We were able to achieve way higher performance than a lot of the bigger guys, and at a fraction of their compute and a fraction of their team size,” a top UAE tech official told Bloomberg.

REVIEWS- So, should you buy a new iPad? Will the device be transformed in a few weeks’ time by the unveiling of a new iPadOS that makes it as Mac-like as the new keyboard case now on sale for the Pro model? In search of answers, we bring you:

Apple iPad Pro (2024) review: the best kind of overkill. (The Verge)
The new Apple iPad Air is great — but it’s not the one to get. (The Verge)
iPad Pro vs. MacBook: The Great Apple Laptop Trade-Off. (WSJ)

CLOSER TO HOME- Israeli troops have been let loose in both the north and south of Gaza and Israel has proposed that the Palestinian Authority should run the Rafah border crossing, which Israeli troops took over last week.

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

In today’s issue: We take a look at what’s being done to make Egypt a hub for green data centers.

Tags:

Sovereign Fund of Egypt WHAT WE’RE TRACKING TODAY

Discover. Connect. Flourish. Join us for the first of many celebrations in honor of the tremendous achievements of Somabay, where you will get a glimpse of luxury living in the Red Sea. In collaboration with Cairo Food Week, we will transport you to a world that is both tasteful and tasty. Create new bonds, while enjoying unforgettable meals crafted by top-notch chefs. Become a part of our booming collective by mingling and getting a taste of our impeccable hospitality and a world-class culinary experience.

INVESTMENT WATCH

Second USD 20 bn tranche of Ras El Hekma funds land in Egypt’s coffers

We got the second tranche of funds from the Ras El Hekma agreement: The Abu Dhabi wealth fund ADQ has delivered the second tranche of the USD 35 bn Ras El Hekma agreement on Sunday, a senior government source confirmed to Enterprise. The tranche consists of USD 14 bn fresh inflows and USD 6 bn in the form of a previous UAE deposit at the Central Bank of Egypt (CBE).

More or less according to plan: We were expecting the funds to land in the state’s coffers between late April and early May. We received the first USD 15 bn tranche of the payment late February, split between USD 10 bn in fresh inflows and USD 5 bn in the form of a previous UAE deposit at the CBE.

The game plan for the funds: Some USD 11 bn of Egypt’s external debt is expected to be written off using funds from the Ras El Hekma agreement. Egypt’s foreign debt hit USD 168 bn during the first half of the current fiscal year, rising USD 3.3 bn compared to the USD 164.7 bn recorded at the end of fiscal year 2022-2023.

Backlogs are also a priority: The CBE is expected to pour USD 6 bn of the Ras El Hekma proceeds into the banking sector, providing sufficient hard cash in the system for banks to help clear arrears and start opening up their FX allocations outside of those importing essential goods.

Tags:

ADQ debt investment watch Ras El Hekma

Two new Crowne Plaza hotels in the works: Kuwaiti real estate player Urbnlanes Developments and the British IHG Hotels & Resorts will set up two new hotels in Egypt with combined investments of USD 85 mn, the companies said in a joint statement (pdf) yesterday. The two hotels, which will operate under IHG’s Crowne Plaza brand, are set to open their doors in 2028.

The hotels: The Crowne Plaza New Cairo — which will be set up in Urbnlanes’ mixed-use development Yellow Residence — will house 180 rooms, a restaurant, club lounge, and five meeting rooms along with an events hall and banquet facilities. Meanwhile, the Crowne Plaza Levels Tower will be located in the new capital, housing 110 rooms tailored for business travelers. It will also offer three upscale restaurants and five meeting rooms.

In line with our ambitious tourism goals: The government wants to see the private sector build at least 200k new hotel rooms as part of its plan to attract as many as 30 mn tourists a year by 2028. To help reach its goal, the government is looking into an initiative offering subsidized loans to local and foreign hospitality players looking to set up more hotel rooms across the country.

IHG is no stranger to the Egyptian market: IHG currently operates seven hotels in Egypt under four brands: InterContinental, Crowne Plaza, Holiday Inn, and Staybridge Suites. IHG is also working with Arabella Group to set up three new hotels in Cairo and the North Coast that are slated to open by 2026 and has plans to open up two new hotels in Sheikh Zayed by 2028.

Neither is Urbnlanes: Founded in 2021, Urbnlanes Developments is a subsidiary of Kuwaiti Emeel Abdallah Investments. It has completed over five administrative, residential, and commercial projects in New Cairo and the new capital with investments of c. EGP 46 bn.

Tags:

hospitality Intercontinental Hotels Group investment watch

Healthcare

Egyptian players are setting up a USD 100 mn healthcare venture

A new healthcare player to enter the scene:Prominent VC investors of Shark Tank fame Allianz Middle East Ship Management General Manager Ahmed Tarek Khaliland Mohamed Farouk have invested USD 100 mn to set up a healthcare firm, Khalil told Asharq Business. The two are yet to name the new company, Khalil added.

Grand plans: The company — of which each partner will own a 50% stake — will be responsible for establishing 1k clinics targeting lower to middle income patients, diagnostic laboratories, and pharmacies over the next three years, according to Khalil.

The local healthcare sector has had considerable interest from investors this year: In the first few months of 2024, news broke that China State Construction Engineering Corporation — the largest construction company in the world by revenue — is in talks with the government to build a medical city project on the outskirts of the new capital. The local arm of UK conglomerate NHMC Group was also awarded a plot of land to set up a USD 300 mn medical and educational complex in Shorouk City.

These are welcome developments for the state: President Abdel Fattah El Sisi insisted that legislative steps be taken to increase the role of the private sector in Egypt’s healthcare in late March after the Madbouly government shared its target to raise the private sector’s share in healthcare to 50% by 2027 — up from a current 30% — in the next fiscal year.

Egyptian-Emirati healthcare cooperation? Health Minister Khaled Abdel Ghaffar discussed health cooperation with the Abu Dhabi Health Department head Mansour Al Mansouri on the sidelines of Abu Dhabi’s Global Healthcare Week, a ministry statement said. The two discussed collaborating to help establish a virtual hospital — an online platform that offers patients the option of attending checkups and talking to doctors online.

Cooperation with Greece is also on the agenda: Abdel Ghaffar also discussed healthcare cooperation with his Greek counterpart Adonis Georgiadis on the sidelines of the event, according to a separate ministry statement. The pair explored cooperation in building and upgrading healthcare facilities, exchanging knowledge, and enhancing medical tourism between the two countries.

Tags:

healthcare investment watch

EARNINGS WATCH

Egyptian fintech giant Fawry’s net income rose 150% y-o-y in 1Q 2024

A strong first quarter for Fawry: EGX-listed fintech giant Fawry saw its bottom line jump 149.1% y-o-y to EGP 307.1 mn in 1Q 2024. The company’s top line grew 60.9% to EGP 1.1 bn during the period, driven by “the expansion and diversification of the company’s business offerings,” according to its latest earnings release (pdf).

Growth across the board: Fawry’s banking services segment — which contributed more than 40% of the firm’s revenue for the quarter — saw its revenues jump 80.2% y-o-y to EGP 456.9 mn. It was followed by the alternative digital payments segment, which added EGP 354.8 mn to the company’s top line — a 27.8% increase from a year before. The financial services segment saw the highest annual growth, jumping 101.3% to EGP 174.2 mn, while revenues from supply chain solutions surged 70.4% y-o-y to EGP 75.6 mn during the same period.

Moving forward: “In February 2024, we acquired the SME financing license… This strategic move aligns seamlessly with our commitment to delivering cutting-edge technology and adaptable solutions, addressing the financial needs of SMEs in Egypt and supporting the government’s initiative to empower this vital sector,” said CEO Ashraf Sabry. Fawry also aims to introduce medical ins. for myFawry prepaid cardholders, as well as payout and payroll solutions customized for SMEs, and corporate cards for SMEs, he added.

Tags:

earnings watch Fawry Fintech

LAST NIGHT’S TALK SHOWS

The nation’s talking heads zeroed in on the inauguration of Mostaqbal Misr’s industrial zone

One story dominated the airwaves last night: The nation’s talking heads were fixated on a single story last night,President Abdel Fattah El Sisi’s inauguration of the first phase of the industrial zone and the beginning of the harvest season at the Mostaqbal Misr project (watch , runtime: 41:37).

ICYMI: The first phase of the project — the first part of the EGP 300 bn New Delta reclamation project — lies along the Rod Al Farag-Dabaa highway and reclaims over 1 mn feddans. The project aims to provide over 10k direct jobs and over 350k indirect jobs.

What more? We have everything you need to know about the New Delta reclamation project in a Hardhat published last year.

El Sisi emphasized the importance of the project, saying that — despite the heavy investment costs — Egypt has “no other choice,” and that “we wouldn’t be able to farm” otherwise.

Adib sounds a cautionary note: “The important question is how do we ensure the sustainability of the project? How will it be maintained and expanded?” El Hekaya’s Amr Adib questioned, referencing the downfall of the Toshka project during the late President Hosni Mubarak’s time (watch, runtime: 29:46).

ALSO ON THE AIRWAVES- Egypt hasn’t buried the hatchet over the crisis in Rafah: Egyptian officials yesterday denied media reports claiming that intelligence chief Abbas Kamel held phone discussions with Shin Bet head Ronen Bar about the Rafah crossing, Kelma Akhira’sLamees El Hadidi said (watch, runtime: 0:53 and 1:32), citing a report by Al Qahera News.

Tags:

Abdel Fattah El Sisi LAST NIGHT’S TALK SHOWS Middle East politics

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ALSO ON OUR RADAR

SEIC to conduct due diligence on CIRA ahead of acquisition plans

M&A-

SEIC to conduct due diligence on CIRA: CIRA Education’s board approved the proposal submitted by the Saudi Egyptian Investment Company (SEIC) — a wholly-owned subsidiary of the Public Investment Fund — to acquire 75-100% of the company through CIRA’s majority shareholder Social Impact Capital (SIC), allowing them to conduct due diligence, the company said in an EGX disclosure (pdf).

Remember: SEIC said last week that it will buy into SIC, the vehicle through which the founding El Kalla family holds a controlling stake in EGX-listed CIRA Education. SIC will use the cash injection to launch a mandatory tender offer to buy CIRA shares at a price of EGP 14 each to up its stake in the company to 75-100%.

ADVISORS- Baker Tilly will act as the transition’s financial advisor and prepare a fair value study for CIRA’s shares. Rothschild & Co is advising PIF, with Allen & Overy and our friends at Matouk Bassiouny doing legal duties. Our friends at EFG Hermes are advising El Kalla family, while White & Case is legal counsel.

REAL ESTATE-

Units at TMG’s debut project in Saudi Arabia are going for sale tomorrow: The Saudi arm of Talaat Moustafa Group will start selling off units in its mixed-use Benan City project tomorrow, TMG said in a statement (pdf). The project’s soft launch, targeting a select clientele, kicked off on Saturday.

Benan City? The smart city is being developed in eastern Riyadh’s Al Fursan in partnership with the Saudi National Housing Company. The SAR 65 bn city will house nearly 27k residential units and it marks the Egyptian real estate giant’s first overseas project.

MANUFACTURING-

Cleopatra Group plans to kick off operations at its new USD 50 mn ceramics factory in June, founder and board chairman Mohamed Abou El Enein told Asharq Business. The factory will operate six ceramic production lines and aims to export 50% of its output, Abou El Enein added.

And in tourism: Cleopatra has invested USD 25 mn in a 450-room hotel in the North Coast’s Sidi Heneish that will open “within ten days,” Abou El Enein said, adding that the company is “currently working to expand [its] investments in the media sector.”

Remember: In November last year, Abou El Enein said that Cleopatra Group was looking to invest some EGP 120 bn into its tourism, real estate, and ceramics subsidiaries.

STARTUPS-

A precious metals investment platform: Local fintech startup Bokra has partnered with gold investment firm Dahab Masr to launch the platform Bokra Dahab, which will allow users in Egypt, UAE, and KSA to invest in precious metals, according to a joint statement (pdf).

Tags:

ALSO ON OUR RADAR CIRA Education Cleopatra M&A Watch Manufacturing Public Investment Fund real estate Talaat Moustafa Group

PLANET FINANCE

Memelord Roaring Kitty is back — and GameStop shorts are feeling the pinch

It’s a mixed morning on Planet Finance, where the big story of the day has analysts and investors alike wondering what’s next with AI as Google, OpenAI, Microsoft, and Apple all jockey for position. (See this morning’s Big Story Abroad, above.)

It’s not Groundhog Day, and you’ve not stumbled into a real world Hot Tub Time Machine: GameStop really is back in the headlines. Short-selling hedge funds lost USD 1 bn yesterday after Roaring Kitty re-entered the chat: The meme lord posted on X yesterday for the first time since 2021, triggering a frenzy that saw GameStop shares soar 74% and put the squeeze on the shorts. Kitty’s memes have flown fast and furious in the hours since.

Does it have legs? Bloomberg’s amazing Money Stuff columnist Matt Levine is back on the trail and even the WSJ is taking note.

BACKGROUND, for those of you who may have forgotten (or were otherwise blissfully unaware of what a “meme stock” is), courtesy CNBC: The 2021 “meme stock frenzy involved individual investors taking aim at short sellers and hedge funds who were pessimistic about the outlook for GameStop and other companies, forcing them to cover their short positions and drive up the price of the target stocks.”

ALSO worth knowing about this morning: Melinda French Gates is hitting the eject button. She’s resigning as the co-chair of the Gates Foundation and will take with her some USD 12.5 bn to continue doing philanthropy. (Financial Times)

MARKETS THIS MORNING-

Asian markets are mixed this morning with no real catalyst appearing to drive early trading and both European and US stock futures are little changed as we prepare to hit “send” on this morning’s issue.

EGX30	25,381	+0.9% (YTD: +2.0%)
USD (CBE)	Buy 46.99	Sell 47.12
USD (CIB)	Buy 47.02	Sell 47.12
Interest rates CBE	27.25% deposit	28.25% lending
Tadawul	12,260	+0.4% (YTD: +2.4%)
ADX	9,093	0.0% (YTD: -5.1%)
DFM	4,173	0.0% (YTD: +2.8%)
S&P 500	5,221	0.0% (YTD: +9.5%)
FTSE 100	8,415	-0.2% (YTD: +8.8%)
Euro Stoxx 50	5,079	-0.1% (YTD: +12.3%)
Brent crude	USD 83.44	+0.8%
Natural gas (Nymex)	USD 2.37	+5.0%
Gold	USD 2,343	-1.4%
BTC	USD 63,046	+2.9% (YTD: +49.3%)

THE CLOSING BELL-

The EGX30 rose 0.9% at yesterday’s close on turnover of EGP 2.3 bn (52.7% below the 90-day average). Foreign investors were net buyers. The index is up 2.0% YTD.

In the green: Madinet Masr (+3.4%), Ezz Steel (+3.4%), and Orascom Construction (+3.3%).

In the red: Eastern Company (-3.6%), Oriental Weavers (-2.8%), and Telecom Egypt (-2.4%).

CORPORATE ACTIONS-

Talaat Moustafa Group will pay out a dividend of EGP 0.22 per share for its 2023 earnings, to be distributed over two installments, the company said in an EGX disclosure (pdf). The first installment will be disbursed on 30 May and the second will be paid out on 31 July.

Tags:

Financial Markets Planet Finance

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

Published every Tuesday in EnterpriseAM.

Read going Green

Going Green

How has Egypt become a hub for green data centers and what could be done to draw more investments to the sector?

Egypt has become an attractive hub for green data centers as more investors want to take advantage of the country’s strategic location at the crossroads of data links between Africa, Asia, and Europe, and having access to a plethora of renewable energy sources to power their projects. Nonetheless, there is more to be done to attract more investments to the sector.

Egypt is already a growth engine for the sector across the region: Egypt was among the countries that helped push expectations that Africa’s data center market size will grow at a compound annual growth rate of 12% between 2019 and 2025 to surpass USD 3 bn by 2025.

But the Mideast and Africa still have much catching up to do: The Middle East has 175 data centers and Africa has 102 data centers, both are way behind Western Europe which hosts 1,694 centers and North America which hosts 2,793, according to the Data Center Map. Egypt alone has 14 data centers.

Remember: A consortium including Swicorp Infra Capital (SIC), Income Egypt, and Record Digital Asset Venture announced in January that it will build, own, and operate a green data center in Egypt, under an MoU inked with the CIT Ministry. The data center will be powered by some 200 MWs of solar and wind energy and will export digital services to customers abroad.

What are green data centers? Green data centers are facilities that use energy-efficient technologies to host servers for data storage, management, and dissemination. They have a lower carbon footprint than traditional data centers, as they rely on renewable energy sources and green tech.

Energy-intensive operations: Global data centers’ electricity usage is expected to exceed 1k TWh by 2026, that’s more than double 2022’s consumption, according to the International Energy Agency (IEA) estimates (pdf) in January. An ICT Ministry source told us that data centers gobble up lots of energy to operate servers and cooling equipment, relying on robust power sources in addition to emergency electricity sources to avoid technical problems. The shift towards using renewables is expected to boost the efficiency of data centers, given the large number of renewable energy projects taking place in Egypt.

Where we stand: The Madbouly government wants renewables to make up 42% of the country’s energy mix by 2030. TC Energy Corp — the largest natural gas pipeline operator in North America — said in a recent earnings call that the increase in energy-hungry data centers will lead to a rise in demand for natural gas. Egypt has been facing shortage in natural gas production, which is driving a shift towards sustainability in several investment areas.

Egypt boasts a large number of renewable energy projects, totaling some 6.2k as of 2022, according to official data. Moreover, 14 submarine cables are currently passing through the country.

How does Egypt strive to be a hub for data centers? The government is providing fiber optic cable paths across borders to serve the secure passage of international data through Egypt, in addition to offering advanced services such as cloud computing and other communication services. Egypt is processing a huge amount of government and banking data and electronic payment systems, and a large segment of smartphone users, according to our sources.

A lot of room for wind projects: Egypt is home to some 173k sqm areas that are suitable for potential wind farm projects with a total capacity of up to 350k MW, equivalent to 10 times the current maximum load of the national power grid, Romany Hakeem, chairman of Beneshty Solar and vice chairman of Sustainable Energy Development Association (SEDA) told Enterprise.

What are the obstacles standing in the way of data center investments? While Egypt’s ICT sector has remained attractive to foreign investors, the lack of executive regulations to the Personal Data Protection Act poses an obstacle to further investments in the sector, Deputy Head of the IT division at the Federation of Egyptian Industries and CEO of Linatel Telecommunications Hamdy El Leithy told Enterprise. The act, which regulates and protects personal data, was issued three years ago.

But that should be solved soon, as a government source told us that the law’s executive regulations will be issued soon, as it is one of the requirements for investment in the sector.

The transition to renewable energy would lead to a significant reduction in the subsidies bill, as electricity is supplied using subsidized natural gas. Therefore, increasing projects that rely on renewable energy will lower the energy bill and enhance Egypt’s export capacity for natural gas, Hekeem told us.

EGP float = cheaper solar panels + more investments: Hakeem said that the stability of the EGP exchange rate and the availability of the greenback have reduced the cost of solar power, whereby it would cost EGP 20k to produce a KW, down from EGP 35k. This has led to a decrease in the payback periods, Hakeem said. On the other hand, there is an increase in the cost of electricity, especially for energy-intensive sectors, he added.

The sector needs more incentives: The sector is lacking sufficient incentives, Hakeem said. He believes that renewable energy investors should be included in the new hydrogen incentives, as green hydrogen projects rely mainly on renewable energy. Additionally, direct support for the industry is needed to support the localization of solar panels manufacturing, which are mainly imported from abroad.

Your top green economy stories for the week:

Danone Egypt is partnering with Shift EV to transform half of its distribution fleet to run on electric power using electrofitting technology, the dairy company’s general manager Hesham Radwan announced. Danone aims to slash carbon emissions by some 6k metric tons and push down operating costs by 70% by 2030, Radwan said.
An unnamed UK company is looking to invest in the country’s green hydrogen sector, with projects soon to be announced, British Ambassador Gareth Bayley said la st week.
A trial run of ten electric taxis will kick off in the new capital tomorrow, to be followed by the project’s first phase that will see 145 electric taxis take to the streets. (Masrawy)

Tags:

Data Centers going green Green Economy green energy technology

CALENDAR

2024

MAY

19-21 May (Sunday-Tuesday): Egypt International Summit for Digital Transformation and Cybersecurity.

20 May (Monday): Malaysian Palm Oil Forum in Cairo, with attendance from Malaysian Plantation and Commodities Minister Johari Abdul Ghani.

22 May (Wednesday): Egypt will host the annual meetings of Arab financial authorities, at the New Administrative Capital.

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

25-27 May (Saturday – Monday): Techne Summit, Cairo International Stadium.

29 May (Wednesday): Virtual launch of Chicago Booth Executive Program.

JUNE

5 June (Wednesday): The Optimism Forum, Cairo, Egypt.

15-19 June (Saturday-Wednesday): Eid El Adha (TBC) (national holiday).

29-30 June (Saturday-Sunday): EU-Egypt Investment Conference.

30 June (Sunday): June 30 Revolution Day (national holiday).

JULY

7 July (Sunday): National holiday in observance of Islamic New Year (TBC).

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

23 July (Tuesday): Revolution Day (national holiday).

AUGUST

4-5 August (Monday-Tuesday): Egypt Expat Forum.

SEPTEMBER

2-5 September (Monday-Thursday): Egypt International Airshow, El Alamein International Airport.

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

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

25-26 September (Wednesday – Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

OCTOBER

6 October (Sunday): Armed Forces Day.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

NOVEMBER

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

DECEMBER

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

EVENTS WITH NO SET DATE

April 2024: President Abdel Fattah El Sisi will visit Turkey.

1Q 2024: Egyptian-Qatari Joint Supreme Committee.

1Q 2024: Opening of the newly developed Pyramids Plateau in Giza.

1Q 2024: The government is set to finalize the sale of the Gabal El Zeit wind farm.

February-May: The Grand Egyptian Museum could officially open to visitors.

March 2024: The USD 2.7 bn MIDOR Refinery is set to begin full operations.

May 2024: Egypt to receive USD 20 bn of Ras El Hekma funds.

May 2024: Arab Finance Ministers’ meeting at Egypt’s administrative capital.

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

Mid-year: The fifth Japan-Arab Economic Forum.

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

2H 2024: Gov’t to launch the Cairo Ring Road BRT buses.

November 2024: Egypt to host the World Urban Forum (WUF12).

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

2025

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

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

EVENTS WITH NO SET DATE

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

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