{"id":590021,"date":"2023-07-12T00:00:00","date_gmt":"2023-07-12T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/how-egypt-compared-to-global-regional-infrastructure-ppp-trends-in-2022\/"},"modified":"2023-07-12T00:00:00","modified_gmt":"2023-07-12T00:00:00","slug":"how-egypt-compared-to-global-regional-infrastructure-ppp-trends-in-2022","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/how-egypt-compared-to-global-regional-infrastructure-ppp-trends-in-2022\/","title":{"rendered":"How Egypt compared to global + regional infrastructure PPP trends in 2022"},"content":{"rendered":"

<\/span>The global overview of public private partnerships in infrastructure in 2022:<\/span> Investment<\/span> commitments to public private partnership (PPP) projects in infrastructure continued to accelerate in 2022, with investment commitments growing 23% y-o-y last year to USD 91.7 bn, according to a recent <\/span>World Bank report (pdf)<\/a><\/span>. PPPs involve collaboration between a government agency and a private-sector company that can be used to finance, build, and operate projects. <\/span><\/p>\n

Still leading the pack globally: East Asia and the Pacific<\/span>, which saw USD 43.4 bn of<\/span> investment commitments last year, rising 54% y-o-y and 17% from the average amount over the past five years. South Asia saw USD 13.9 bn earmarked during 2022, marking its highest number of PPI investment over the past decade, according to the report. <\/span><\/p>\n

In MENA, PPP investments for the year continued to account for the smallest share of the<\/span> global total, despite more than tripling from the year prior.<\/span> Investment commitments to infrastructure PPPs in the MENA region hit USD 2.0 bn, rising 214% y-o-y, although this figure \u201cwas still lower than the region\u2019s average of USD 3.1 bn over the past five years,\u201d the report says. In terms of regional GDP, MENA fared slightly better than last year, with PPP investments accounting for 0.13% of the region\u2019s national GDPs. That\u2019s 0.6 percentage points higher than last year\u2019s ratio, but still remains among the lowest percentages globally. <\/span><\/p>\n

Egypt accounted for the lion\u2019s share (85%) of the region\u2019s infrastructure PPPs in 2022<\/span>,<\/span> followed by Morocco with 9% and Tunisia with 5%. <\/span><\/p>\n

REMEMBER- The Madbouly government has been working to increase the volume of<\/span> PPPs in Egypt<\/span>, passing legislative amendments <\/span>last year<\/a><\/span> designed to make it easier for companies to bid for government contracts. The government sees PPPs as forming a key part of its <\/span>privatization strategy<\/a><\/span>, which will attempt to double the private sector\u2019s role in the economy over the next three years. <\/span><\/p>\n

Our biggest infrastructure PPP project of the year: The 500 MW wind farm in Ras Ghareb<\/span> that will be built by Amunet, a local special purpose vehicle in which Al Nowais subsidiary AMEA Power holds a 60% stake and Japan\u2019s Sumitomo Corporation holds the remaining balance. AMEA Power is set to build, manage, and operate the plant, for which it received debt and equity funding <\/span>in December<\/a><\/span>.<\/span><\/p>\n

Overall, the energy sector was the largest recipient of investment commitments for<\/span> infrastructure PPPs in Egypt last year<\/span>, with four out of the total five infrastructure projects that reached financial close last year in the energy sector, according to <\/span>country-specific data from the World Bank<\/a><\/span>. The fifth project in Egypt fell under the municipal solid waste sector. <\/span><\/p>\n

Globally, however, the transport sector once again took the lead as the largest recipient<\/span> of infrastructure PPP investments<\/span>, \u201coutpacing other sectors significantly,\u201d the report notes. The sector \u2014 which covers everything from roads and airports to railways and ports \u2014 recorded USD 66.2 bn-worth of investments in 2022, accounting for 68% of total infrastructure PPP investments for the year. That\u2019s a c.51% y-o-y increase from 2021 figures, which \u201ccan be explained by a huge increase in the roads sub-sector,\u201d which is \u201chistorically the largest sub-sector in transport commitments,\u201d according to the report. <\/span><\/p>\n

Investments in global water and sewage PPPs last year fell 76% y-o-y<\/span>, coming in at USD<\/span> 2.3 bn across 25 projects in nine countries. That\u2019s also a 48% drop from the average figures of the past five years, the report notes. <\/span><\/p>\n

Egypt is expected to see an uptick in water PPP projects this year<\/span>, with the Sovereign<\/span> Fund of Egypt\u2019s (SFE) tender of renewables-powered desalination projects, for which the fund prequalified 17 consortiums <\/span>earlier this year<\/a><\/span>. The tender is part of the government\u2019s water desalination program, which aims to add 8.85 mn cbm \/ d of capacity by 2050. The SFE is planning to have three or four of these plants tendered by 3Q 2023, with contracts for the remaining plants in the program\u2019s first phase expected to be signed in the next 16-22 months, an SFE spokesperson previously told Enterprise. <\/span><\/p>\n

On the global scale, the majority of financing came from the private sector \u2014 although its<\/span> share shrank y-o-y:<\/span> Around 35% of financing came from public sources, 15% came from development and export finance institution (DEFI) sources, and the remaining 50% came from private sector sources. The figures show a 15 percentage point y-o-y drop in private sources of financing in 2022, while public sources of financing rose 17 percentage points compared to the previous year, which \u201cwas largely due to the larger role played by public banks and a rise in government subsidies,\u201d the report explains.<\/span><\/p>\n

MENA, however, continued to be largely reliant on DEFI investment<\/span>, which accounted for<\/span> 77% of the total commitments in 2022 compared to 55% in 2021. \u201cMENA also saw an increase in international commercial debt, with three projects receiving investment from commercial lenders,\u201d including the Amunet wind farm in Egypt, the report says. <\/span><\/p>\n

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