2021 in review Part 1 — The year private sector education truly emerged: In many ways, 2021 was the private sector’s year for education in Egypt. The year kicked off with the Education Ministry scrapping the 20% cap on foreign ownership of schools — a problem that had raised serious concerns among school operators and investors, who feared the decision would deter investors and slow expansion plans in education, one of Egypt’s most promising sectors.

This set the tone for the rest of the year: Since then, we’ve seen a true partnership emerge between large private K-12 and university operators and the government, whereby the former invests in conjunction with the policy initiatives set out by the latter. New private schools and universities opened up, and even governorate expansion started gathering steam. The private sector worked effectively with the government to boost technical education. Public-private partnerships in large-scale education investment vehicles drew substantial investment. And nothing really says emergence more than an IPO, as higher education platform Taaleem broke our IPO drought in 2021.

The biggest theme of the year has to be the development of a truly successful PPP model in education, starting with technical colleges. Setting up new technical colleges — apprenticeship programs merging academics and technical training that offer two-year + two-year degree programs — was a stated investment priority for the Higher Education Ministry in FY2021-2022, with plans underway to launch six new government technical colleges after three were recently established in New Cairo, Quesna and Beni Suef.

The private sector upped its support for technical colleges in 2021, with CIRA announcing plans to launch Egypt’s first private technical college in September 2023, using curricula provided by international partners. Elsewedy, Samsung and Bavaria had previously funded labs at public tech colleges, and Korea Tech University had awarded University Beni Suef University of Technology a grant of USD 5.8 mn. Many players expect private sector interest in establishing new technical colleges — or building the capacity of tech departments in existing private universities — to continue growing, they told Enterprise.

But it wasn't until large-scale investment platforms drew significant investments did public-private collaboration reach new heights. 2021 saw large-scale public-private investment platforms take off in a huge way. CIRA and Al Ahly Capital Holding announced the launch of their new EGP 2 bn company to invest in middle-income education providers. It joins the CIRA-Elsewedy Capital Holding venture, for which the New Urban Communities Authority is allocating land to build the New Damietta university. State-backed Lighthouse Education platform recently reached a first close of EGP 560 mn, beating its initial fundraising target. And the EFG Hermes Education Fund — set up as a 50/50 JV between EFG and GEMS Education — received a EGP 250 mn commitment from the Sovereign Fund of Egypt.

Why was this a PPP education model that beat out what came previously? For one, long-term investment in an education platform beats one-off projects and schools as operators can attract stronger talent and spend more on education development, JV heads tell us. It also allows for investment at scale, which gives operators a diverse and innovative lineup of projects. Financial risks and capex spending is being shared by both public and private entities. And crucially, PPP platforms also afford the investor better options for a successful exit.

This hasn’t kept private sector operators from expanding on their own, with plans to open new K-12 schools moving forward. A new branch of the British Columbia Canadian International School (BCCIS) and the first Egyptian branch of Germany’s Saxony International School (SIS) both opened in September, says Karim Mostafa, CEO of CIRA subsidiary Eduhive, which manages them. Kent College Egypt, set to open its doors in 2H2022, has already started its admissions process, Chairman Shady Eshra confirms. Egypt Education Platform — formerly GEMS Egypt — added multiple schools to its international stream, including most recently a new branch of Hayah International Academy in West Cairo.

…Along with universities: 2021 saw the establishment of the European Universities in Egypt (EUE), the latest international branch campus to successfully set up shop in Egypt. EUE hosts the UK’s University of London and University of Central Lancashire, according to its website. Meanwhile, CIRA and Elsewedy Capital Holding announced in August their plans to build and run an EGP 2.5 bn private university in New Damietta, set to open to students in the 2023-2024 academic year.

And throughout the year, there’s been a buzz of interest from overseas investors: The decision to remove the 20% cap on foreign ownership limits sparked immediate and palpable investor interest, according to sources. One major global investor eyeing Egypt’s education sector is Actis, controlling shareholder of the largest private higher education business in Africa: Honoris United Universities. Honoris is prioritizing an Egyptian entry, Actis partner and Middle East & North Africa chief Sherif El Kholy told us in March.

And what better way to celebrate the emerging powerhouse of private sector education than with a successful IPO: Higher education outfit Taaleem’s April IPO — Egypt’s first since December 2019 — saw its shares rise some 6% on the first day of trading. The offering saw 46.55% of the company’s shares placed with institutional investors in a private placement and another 2.45% stake sold to retail investors. The retail portion closed more than 29x oversubscribed, while the offering to institutional orders was 2.34x oversubscribed.

All in all, a strong case was made in 2021 for the value of private sector investment in education — for investors, institutions, and the sector overall.

In Part 2 of our Blackboard Year-in-Review: We look at how the covid-19 pandemic has accelerated the education system’s adoption of new technology, and new learning models with an eye towards meeting the labor market’s needs.

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Your top education stories for the week:

• UNESCO and Huawei will establish a distance learning center set to help 950k Egyptian K-12 educators link up school and home learning, under a three-year joint project to boost digital transformation in education in Egypt, Ghana and Ethiopia.
• The government wants to upskill the labor market to tackle the issue of jobs at risk due to automation, Planning Minister Hala El Said said at the Global Forum for Higher Education and Scientific Research.
• Parents could soon face financial penalties if their children miss a week of school without sufficient reason under amendments to the Education Act greenlit by the Madbouly Cabinet last week.