{"id":667430,"date":"2025-06-25T00:00:00","date_gmt":"2025-06-25T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/how-is-egypts-construction-sector-shifting\/"},"modified":"2025-06-25T00:00:00","modified_gmt":"2025-06-25T00:00:00","slug":"how-is-egypts-construction-sector-shifting","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/how-is-egypts-construction-sector-shifting\/","title":{"rendered":"How is Egypt\u2019s construction sector shifting?"},"content":{"rendered":"

E<\/strong>gypt\u2019s i<\/strong>nfrastr<\/strong>ucture and construction sector has undergone a major <\/strong>transformation <\/strong>over the past decade<\/strong>, driven by large-scale national projects spanning energy, water, housing, and smart infrastructure. While the state continues to steer public investment, momentum is building for greater private-sector participation.<\/p>\n

But the path forward isn\u2019t without hurdles:<\/strong> Regulatory reforms, creative financing tools, and flexible operating models are crucial for adapting to changing economic conditions. In today\u2019s Hardhat, we explore key prospects and challenges in the local construction scene, as laid out by top execs, government experts, and private-sector players at the Big 5 Construct Egypt and Egypt Infrastructure Expo.<\/p>\n

\n

PROSPECTS-<\/p>\n

Egypt has been making major infrastructure progress over the past <\/strong>ten years<\/strong>, particularly in water and renewables, said Orascom Construction VP Tamer Shafik, pointing to efforts to boost water treatment capacity. The country is targeting 9 mn cbm of treated water per day by 2050, up from 1.3 mn today. Orascom is currently working on nearly 900 MW of wind energy projects, Shafik said, emphasizing the need for continued public-private partnerships (PPP) to meet rising development needs.<\/p>\n

Real estate stock needs clearer exit strategies: <\/strong>While Egypt is capable of becoming a regional real estate hub, it still lacks a fully conducive investment climate, particularly in capital repatriation, said Cairo University Professor Hassan El Sady. \u201cInvestors want visibility on how they can exit with capital and profits,\u201d he said, calling for flexible governance and tools like sukuk and green bonds.<\/p>\n

Real estate is a GDP heavywei<\/strong>ght: <\/strong>Real estate accounts for a notable percentage of the country\u2019s GDP, making it a strategic pillar of the economy, said Precision Consulting Engineering chairman Waleed Sweida. \u201cResidential, commercial, industrial, and tourism projects offer an upside, thanks to low labor costs and natural resources.\u201d<\/p>\n

Mixed-use projects delivering highest returns:<\/strong> Demand is rising for mixed-use projects that combine ownership and renting, and they\u2019re producing the best returns in the market, Redcon Construction Chief Business Officer Noha Nael said. While industrial and infrastructure projects remain high-value national priorities, project returns depend heavily on getting the right operating and marketing model in place, she added.<\/p>\n

PPPs need trust to work:<\/strong> Egypt began developing PPP frameworks early and now has the experience to deliver value-added projects, said Finance Ministry Advisor for Facility Management Sherif Mansour. The key to making it work? Transparency and clear commitments on both sides, Mansour said. The state is increasingly open to investor feedback, as it seeks to offer the institutional frameworks that investors need.<\/p>\n

\n

NO ONE-SIZE-FITS-ALL FOR PPP PRICING MODELS-<\/p>\n

One PPP model won\u2019t do:<\/strong> Pricing and contracting structures vary across projects, Finance Ministry\u2019s Private Partnership Unit head Ater Hanoura said. In education PPPs, the base price per student \u2014 say EGP 10-15k \u2014 is set in the contract and adjusted annually by 5-7% in line with the Education Ministry\u2019s benchmarks. But port PPPs follow a revenue-share model instead, with no fixed pricing \u2014 investors offer a share of project revenues to the state in competitive bidding rounds, Hanoura explained.<\/p>\n

Risk-sharing is key to PPP success:<\/strong> PPP models must strike the right balance of risk between the state and investors to ensure project sustainability, Hanoura said. Two financing models are common \u2014 institution-based and project-based. The project-based approach focuses more on feasibility, tender quality, and investment protection \u2014 including sovereign protections \u2014 to de-risk participation. Banks act as stakeholders with rights to assets, but not the right to sell. Contracts ensure continued operation even if investors exit, with the state stepping in under the PPP Law.<\/p>\n

Inflation and FX volatility are major risk factors:<\/strong> Forcing private investors to shoulder unpredictable risks like inflation and FX swings raises project and service costs, Hanoura said. Contracts may allow deferred inflation payments (based on Capmas data) or FX-linked clauses \u2014 protecting investors without burdening the state.<\/p>\n

Blended finance helps bridge bankability gaps:<\/strong> Some projects may not be commercially viable at standard pricing levels. In these cases, the government can step in with blended finance \u2014 contributing a portion of the project cost to lower service prices and boost financial feasibility. This can include long-term, low-interest state-backed loans or direct budget support. Designing PPP projects requires flexibility and precision, Hanoura said, noting that \u201ceach case is unique, there\u2019s no room for cookie-cutter approaches in PPP.\u201d<\/p>\n

\n

TO BOOST THE GREEN BUILDING BOOM-<\/p>\n

Green buildings are now seen as a smart investment <\/strong>\u2014 not just an environmental choice \u2014 for developers, designers, operators, and financiers, said International Finance Corporation (IFC) Edge Expert Eman El Garhy. The IFC\u2019s Edge tool is a green building certification system that aims to make new residential and commercial buildings more resource-efficient, helping optimize building design with metrics on savings, material choice, and ROI. \u201cEdge shows you, in clear steps, how to build a green building at the lowest possible cost. It calculates for you the savings in energy and water and the choice of materials, and it gives you financial indicators \u2026 facilitating decision-making for each category according to its priorities,\u201d El Garhy said.<\/p>\n

Everyone sees value from a different angle<\/strong>, with designers focusing on technical efficiency, operators on savings, owners on ROI, and financiers on risk-adjusted returns. Despite perceptions that sustainability is expensive or complex, tools like Edge are making it more accessible and attractive, El Garhy said.<\/p>\n

Developers must prepare for stricter environmental standards<\/strong> as countries and markets are increasingly demanding sustainable real estate and industrial practices, El Garhy said. \u201cNew regulations are emerging every day requiring specific environmental certifications. If we\u2019re not prepared now, we\u2019ll face major challenges later.\u201d Some Egyptian banks have already adopted green financing tools based on Edge classification \u2014 a positive market trend, she added. El Garhy called for greater awareness of these underused tools, which can ease access to financing and boost profitability.<\/p>\n

An example of what sustainable construction at scale looks like: <\/strong>Orascom Construction, one of the region\u2019s largest contractors, is embedding sustainability into its growing global portfolio. Alongside its local and regional operations, the company is active across the US, Europe, and Australia, and it holds 50% of Belgium\u2019s largest contractor BESIX, with suitability at the core of its operations. The firm\u2019s work on the Grand Egyptian Museum earned it the Edge Advanced Green Building Certification from the IFC, making it the first museum in Africa and the Middle East to receive the certificate. The firm's sustainability portfolio<\/a> also includes hydropower across the region and the fully-electric monorail.<\/p>\n","protected":false},"excerpt":{"rendered":"

Unlocking green infrastructure potential in Egypt will count on PPP innovation, blended finance, and investor-friendly reforms<\/p>\n","protected":false},"featured_media":667431,"menu_order":0,"template":"","categories":[7235],"tags":[130,72,7116,83,150],"class_list":["post-667430","hardhat","type-hardhat","status-publish","has-post-thumbnail","hentry","category-hardhat","tag-construction","tag-enterpriseam","tag-hardhat","tag-real-estate","tag-renewable-energy","wpautop","entry"],"acf":{"mongo_id":"4d84d5cf-81a5-4a04-95fb-5accb77f29d5","order":"12","is_powered_by":false,"story_type":"2","photo_url":"https:\/\/ent.news\/2025\/6\/1444.jpg","photo_position":"above","homepage_title":"","full_issue_title":"How is Egypt\u2019s construction sector shifting?","related_issue":[667409],"teaser":"Unlocking green infrastructure potential in Egypt will count on PPP innovation, blended finance, and investor-friendly reforms","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/6\/.24623112-718a-40b9-9f5c-49983503868b.mp3"},"yoast_head":"\nHow is Egypt\u2019s construction sector shifting? 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