{"id":549095,"date":"2022-09-04T08:42:56","date_gmt":"2022-09-04T08:42:56","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/04\/this-morning-new-details-on-state-privatization-program-this-week-green-hydrogen-regs-are-in-the-works\/"},"modified":"2022-09-04T08:42:56","modified_gmt":"2022-09-04T08:42:56","slug":"this-morning-new-details-on-state-privatization-program-this-week-green-hydrogen-regs-are-in-the-works","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/04\/this-morning-new-details-on-state-privatization-program-this-week-green-hydrogen-regs-are-in-the-works\/","title":{"rendered":"THIS MORNING: New details on state privatization program this week + Green hydrogen regs are in the works"},"content":{"rendered":"

Good morning, friends, and welcome to the first full week of September. <\/strong>With just a month left in 3Q, the themes this morning are pretty typical of the year to date: The foreign exchange crunch, investment in green energy ahead of COP 27, and the fate of the privatization program. It\u2019s the trifecta of 2022.<\/p>\n

Before we get started: <\/strong>Happy labor (labour) day to all of our readers in the United States and Canada. We hope you\u2019re enjoying the last weekend of summer.<\/p>\n

And an apology: <\/strong>We\u2019re sorry to have missed our customary 6am CLT deadline this morning. We\u2019ve resolved the technical glitch for email and are working to fix it on web. We expect to be on time tomorrow. Sorry, folks\u2026<\/p>\n

***<\/strong><\/p>\n

Tell us how you\u2019re feeling about your business and the wider economy<\/strong> and we\u2019ll be back with the results just in time to give you a sense of what everyone else is thinking heading into budget season.<\/p>\n

How has 2022 been for your business? And how do you feel about what\u2019s left of the year? <\/strong>Are you investing? Do you plan to hire new staff (or make cuts to your existing staff) now or in 2023? What\u2019s the USD \/ EGP rate you expect to use for your 2023 budget? Where do you see your industry as a whole heading?<\/p>\n

Make your voice heard in our Fall Reader Survey.<\/a><\/strong> It won\u2019t take more than a few minutes to complete.<\/p>\n

***<\/p>\n

<\/a> WATCH THIS SPACE #1- The privatization programme is still a \u201cpriority\u201d: <\/strong>That was the key messaging coming from the government<\/a> following a meeting between Prime Minister Moustafa Madbouly and the heads of the EGX and Financial Regulatory Authority on Thursday to discuss the government\u2019s plans to divest stakes in companies it owns. In an interview with Bloomberg Asharq<\/a> on Thursday, Finance Minister Mohamed Maait said that the government would announce more details about its privatization plans this week but offered no further details.<\/p>\n

The privatization programme has been hit by yet more delays this year<\/strong> due to the market turbulence at home and abroad, which has caused state-owned Banque du Caire and privately held Aman to postpone their plans to debut on the EGX. The privatization program also includes plans to divest assets through direct sales to strategic partners, while other companies (such as military-owned filling station chain Wataniya and bottled water maker Safi) could see stakes sold to strategics ahead of offerings of equity on the EGX.<\/p>\n

Clarity on plans to sell state assets will likely be important to the IMF: <\/strong>With talks now in the crunch phase after Sri Lanka and Pakistan lined up facilities last week, Fund officials will likely want to see clarity on privatization as one of the conditions to granting another loan to Egypt. Since launching back in 2018, the current iteration of the state\u2019s stake sale program has seen only the IPO of payments giant e-Finance and the sale of secondary stakes in Eastern Company and Abu Qir Fertilizers.<\/p>\n

\n

<\/a> WATCH THIS SPACE #2- Some of Egypt\u2019s biggest climate projects could be in line for <\/strong>financing from the US, the EU + international lenders: <\/strong>Climate projects in Egypt\u2019s energy, food and water sectors \u2014 some of which were recently shortlisted<\/a> during climate finance roundtables \u2014 will receive backing from the US, the European UNion and other international lenders, according to an Environment Ministry statement<\/a>. The projects were shortlisted as part of our Nexus of Water, Food and Energy (NWFE) program<\/a>, which aims to connect national projects with climate financing. International Cooperation Minister Rania Al Mashat and Electricity Minister Mohamed Shaker discussed in a meeting yesterday energy projects listed under NWFE, according to astatement<\/a> by the ministry.<\/p>\n

The climate finance agreements with our American and European friends will be announced during COP27<\/strong> in November, Environment Minister Yasmine Fouad said on Thursday during a sit-down with US climate envoy John Kerry on the sidelines of the G20\u2019s climate-focused meeting in Indonesia. The European Bank of Reconstruction and Development (EBRD) and other unnamed donors could pitch in to a USD 10 bn project to replace 17 fossil-fuel fired power plants<\/strong> with solar and wind power, Fouad said. We\u2019ll have to wait until COP for the full details.<\/p>\n

\n

<\/a> WATCH THIS SPACE #3- Green hydrogen regs are coming: <\/strong>The Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) plans to announce a regulatory framework governing investments in green hydrogen projects next month, Al Borsa<\/a> reported yesterday, citing unnamed sources. Officials have held talks with an unnamed foreign advisory firm to help draft regs and model contracts that would be signed with prospective investors.<\/p>\n

REMEMBER- <\/strong>Dozens of firms<\/a> have pledged USD bns of investment<\/a> for green hydrogen and green fuel projects here. The latest round of MoUs came last week when seven regional and European firms signed up<\/a> to explore building facilities with a combined annual capacity of more than 5.5 mn tons.<\/p>\n

The big question: <\/strong>How many of these MoUs get turned into contracts. Egypt is positioning itself as the region\u2019s premier energy hub, and Europe is more energy-hungry than ever. But with the United States about to offer producer subsidies and rising interest rates set to drive up investment costs\u2026<\/p>\n

** CORRECTION-<\/strong> We incorrectly reported last week that the Financial Regulatory Authority was holding consultations to introduce a carbon offset tax. The statement released by the regulator actually refers to the long-standing plans to set up a local carbon market, allowing companies to buy and sell carbon credits. We have since corrected the story on our website<\/a>.<\/p>\n

HAPPENING TODAY-<\/strong><\/p>\n

Some companies are about to get a three-year real holiday from real estate taxes: <\/strong>Small and micro-sized businesses as well as companies in some 19 strategic industries involved in national projects will pay zero real estate taxes for the next three years, after cabinet ratified the measure<\/a>, according to the Official Gazette last week. The tax break is retroactive to the start of this year. The measure was first announced as part of the EGP 130 bn economic support package<\/a> unveiled by the Madbouly government in the spring and is expected to cost the government some EGP 3.75 bn.<\/p>\n

HAPPENING TOMORROW- <\/strong><\/p>\n

PMI data:<\/strong> S&P Global will publish August\u2019s data measuring activity in Egypt\u2019s non-oil private sector. The contraction in the private sector continued apace in July<\/a> as high inflation weighed on output and demand.<\/p>\n

The board overseeing the National Dialogue will hold its next meeting<\/strong>, choosing rapporteurs for all of the committees and subcommittees of the social, political and economic tracks. It will also work on topics of discussion for the dialogue.<\/p>\n

Palestinian President Mahmoud Abbas will be in Cairo ahead of an Egyptian-Palestinian <\/strong>summit on Tuesday<\/strong>, the country\u2019s foreign ministry said in a statement<\/a>. The two sides will discuss the situation in Palestine and the possibility of releasing Palestinian prisoners in Israeli custody. Egypt played a key role in brokering last month\u2019s ceasefire<\/a> following clashes between Israel and Gaza militants.<\/p>\n

OPEC+ meets to set output policy amid a wave of uncertainty in the markets<\/strong> that has resulted in the longest streak of monthly drops in crude prices since the pandemic, Bloomberg<\/a> reports. Most analysts and traders surveyed by the business newswire expect the oil cartel to keep output steady. Brent crude futures are currently trading at around USD 93 a barrel \u2014 down nearly a quarter on their June peak.<\/p>\n

\n
\n
\n
\n

\n Get Enterprise<\/b> daily
\n <\/h4>\n<\/p><\/div>\n

The roundup of news and trends that move your markets and shape corporate agendas delivered straight to your inbox.<\/p>\n

Subscribe here<\/a>\n <\/div>\n<\/p><\/div>\n<\/div>\n

THE BIG STORY ABROAD- <\/strong><\/p>\n

Energy war between Russia and Western countries escalates: <\/strong>Russia\u2019s state-owned firm Gazprom has indefinitely suspended gas flows through the key Nord Stream 1 pipeline to Europe, hours after G7 nations said they would proceed with plans to impose a price cap<\/a> on Russian oil exports. The pipeline was under maintenance for a \u201ctechnical failure\u201d and was set to become operational yesterday before Gazprom said<\/a> it would not turn the taps back on because of an oil leak. The energy crisis in Europe has been hitting headlines since Gazprom cut capacity on Nord Stream 1 to just 20% of its normal capacity, triggering an unprecedented surge in gas prices on the continent. The story is everywhere \u2014 on both sides of the pond and in both the business and the mainstream press: Reuters<\/a> | FT<\/a> | DW<\/a> | BBC<\/a> | CNN<\/a> | AP<\/a>.<\/p>\n

Also getting attention:<\/strong><\/p>\n