Tuesday, 4 May 2021

J&J, Sputnik jabs coming to Egypt as third wave washes over the nation



Good morning, wonderful people, and welcome to a very short workweek. We hope you all had a relaxing long weekend with family and (socially distanced) friends.

We’re just a little over a week away from our next holiday, as Eid El Fitr looks likely to begin next Thursday, 13 May and end on Saturday, 15 May.

PSA #1- We’re looking at a six-day heat wave: The mercury is headed for 42°C today and will peak at 44°C on Sunday, according to our favourite weather app, before falling to a more seasonally appropriate 32°C on the first day of Eid El Fitr.

PSA #2- So, when do we eat? We sit down for iftar at 6:34pm this evening, and will have until 3:33am to wrap up our sohour.

THE BIG STORY here at home this morning? That could be the rising amplitude of the third wave now washing across the nation — and increasingly encouraging signs about future vaccine availability. We have all the details in this morning’s news well, below.

THE BIG STORY INTERNATIONALLY- It’s a toss-up between US President Joe Biden announcing last night that he would raise the cap on the US’ annual admission of refugees — and Bill and Melinda Gates deciding to get a divorce (statement on Twitter) after nearly three decades of marriage (the NYT has more).


Businesses have until today to file their wage tax returns, the Tax Authority said in a statement on Friday. The due date for submitting returns was originally 30 April but the Tax Authority extended the deadline due to the national holidays. You also have until today to file your corporate tax return, which was also due on 30 April.

US Special Envoy for the Horn of Africa Jeffrey Feltman begins today a 10-day trip that will take him to Egypt, Eritrea, Ethiopia, and Sudan “to address the interlinked political, security, and humanitarian crises” in the area, according to a State Department statement. Feltman — who was appointed last month — will meet with officials from the four countries, as well as from the UN and African Union. His trip comes as Egypt continues to lobby for US involvement in the Grand Ethiopian Renaissance Dam impasse. We have more in this morning’s news well.

A separate team of senior US officials could be making a stop in Egypt this week as part of a region-wide tour to assuage concerns about the Biden administration’s bid to revive the nuclear agreement with Iran, Bloomberg reported on Friday. The team of National Security Council and State Department officials will reportedly also make stops in Saudi Arabia, the UAE, and Jordan.

A court decision could be handed down today on Shoei Kisen’s appeal against the seizure of the Ever Given. The Japanese company appealed the decision of an Ismailia court that last month allowed the Suez Canal Authority to seize the ship while it seeks more than USD 900 mn in compensation for the incident. Shoei Kisen also wants the owners of the 18k containers on board to help pay the damages, the Associated Press reported Friday. Meanwhile, three of the 25 crew members still aboard the Ever Given will be allowed to return home to India after their contracts expired, the ship’s German manager Bernhard Schulte Shipmanagement said in a statement.

** CATCH UP QUICK with the top stories from last Wednesday’s edition of EnterprisePM:


*** 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 look at what analysts and business owners think Egypt could do to better tackle its air pollution woes — which the World Bank estimates is costing usd EGP 47 bn per year — including financial incentives to boost renewable energy, capping emissions from the most polluting industries, and using cleaner carbon capture technology.


Blanca beach welcomes an ideal mix of uninterrupted relaxation and lively happenings, inviting in nature and heavenly views in every direction. Embraced by a picturesque bay, it’s easy to see why Blanca is the enchanting heart of Somabay.


Sputnik and J&J coming to Egypt as third wave washes over the nation

The Health Ministry reported 1,078 new covid-19 infections yesterday, up from 1,051 the day before. Yesterday’s daily case count is the highest since 7 January, when the ministry reported 1,219 new cases. Egypt has now disclosed a total of 230,713 confirmed cases of covid-19. The ministry also reported 62 new deaths, bringing the country’s total death toll to 13,531.

Third wave going strong: Egypt’s covid-19 case tally from last week is five times the number of cases recorded during the same week last year at the peak of the first wave, Health Minister Hala Zayed said in a statement. The five governorates with the highest infection rates are Cairo, Giza, Minya, Fayoum, and Sohag, according to Zayed. Daily covid cases topped 1k last week for the first time since mid-January.

A total of 501 doctors have now died nationwide of complications from covid-19, the Egyptian Medical Syndicate said yesterday. The count stood at 467 doctors as of two weeks ago.

All-night Tahajjud prayers are banned across the country, while evening Taraweeh prayers will continue to be allowed, the Endowments Ministry said, according to Youm7. Imams who allow Tahajjud prayers risk dismissal, the ministry said.

Egypt has sufficient supplies of oxygen and medical equipment to treat the rising number of infections, said head of the Federation of Egyptian Industries’ pharma division head Ahmed El Ezaby, according to the local press.

VACCINE UPDATE- Sputnik incoming: Russia will send 10 mn doses of its Sputnik V jab to Egypt after signing a contract recently with the Health Ministry, spokesperson Khaled Megahed told Youm7. Costs for importing the Russian vaccine have been paid up in full, Megahed said, without disclosing a specific timeline to when the vaccines will land in Egypt or over how many shipments. Egyptian regulators earlier this year authorized the use of the Russian vaccine, which has reported a 92% efficacy rate. This is in addition to the 40 mn doses per year that local manufacturer Minapharm has agreed to produce starting later this year.

We should also be getting our hands on 4 mn doses of the Johnson & Johnson vaccine in 4Q2021, according to Megahed. Presidential health advisor Mohamed Awad Tag Eldin said last week that a shipment of the single-dose jab will be received through the African Union, but didn’t mention through which mechanism they would be delivered.

Egypt will begin manufacturing China’s Sinovac jab next month, the Health Ministry’s Mohamed Abdel Fattah told Extra News (watch, runtime 3:24).

A total of 2.2 mn people have now registered to receive a covid-19 vaccine in Egypt, Megahed told Ala Mas’ouleety’s Ahmed Moussa yesterday, with some 80k individuals registering each day. The ministry has contacted around 1.5 mn of those who registered to receive their jabs, and some 900k individuals have been inoculated (watch, runtime: 3:50).

Did you miss your appointment? The ministry already allows you a three-day grace period to show up, but if you missed that window, you can reschedule your jab through the vaccination website or through the ministry’s hotline (15335), Assistant Health Minister Aysam Salah told El Hekaya’s Amr Adib (watch, runtime: 18:41).

Could Egypt eventually be tapped to produce BioNTech jabs for Africa? BioNTech — the company behind the mRNA technology powering the Pfizer vaccine — is in talks to set up plants in Africa in a bid to boost supply to the continent, Bloomberg reports, quoting CEO Ugur Sahin. Most of the 2.5 bn doses pledged by BioNTech and Pfizer this year are going toward wealthy countries, while Africa lags behind.

Egypt, Senegal and South Africa are the only African countries with the capacities to produce vaccines, and most organizations in these countries can only package them rather than produce them from scratch.


Egypt remains top carry trade as CBE leaves rates on hold

The Central Bank of Egypt (CBE) left rates on hold for a fourth consecutive meeting last Wednesday as policymakers looked to keep Egypt’s carry trade the most attractive in the world — and anticipated heightened inflation. The Monetary Policy Committee (MPC) said in a statement (pdf) following the meeting that indicators suggest the economy is recovering to pre-pandemic levels and that inflation has stabilized, though cautioned that international commodity and food prices are continuing to rise.

Where do rates stand now? Overnight deposit and lending rates are unchanged at 8.25% and 9.25% respectively, while main operation and discount rates remain at 8.75%.

The hold was expected by all 14 analysts and economists we surveyed ahead of the meeting. The pool was in agreement that rising commodity prices and heightened US interest rates would prompt the central bank to maintain rates at current levels to maintain portfolio flows and avoid stoking a pick up in inflation.

The decision means Egypt’s real rates continue to be the highest in the world, according to Bloomberg, which tracks rates offered by 50 countries around the world. Egypt’s real rate tops the list at 3.8%, with both Vietnam and Turkey coming in second at 2.8%.

“Monetary policy has been driven by the need for inflows,” Jefferies International MENA Analyst Alia Moubayed told Bloomberg TV (watch, runtime: 50:21). “In the absence of a fast recovery, in tourism on the one hand but also FDI and a strong export boost, the central bank is using interest rate policy as a channel for further flows into the Egyptian economy and helping it to meet its large external financing needs for this year,” she said. Foreign investment in EGP bonds eclipsed their pre-covid peak earlier this year, rising to USD 29 bn in February. Egyptian debt saw some USD 18 bn in outflows between March and May last year as foreign investors fled to safe haven assets in response to the covid pandemic.

The need for portfolio inflows will remain until tourism revenues begin to pick up and FDI increases, Bloomberg reported HSBC economist Simon Williams as saying before the meeting. Tourism revenues fell to just USD 1.78 bn between July and December, down from USD 7.25 bn during the same period in 2019, according to central bank figures.

Keeping rates high is all the more important in the face of rising yields in the US: Egypt remains vulnerable to rising US yields which threaten to tempt foreign investors away from emerging markets, Pharos’ head of research Radwa El Swaify told us. A rapid recovery in the US, combined with the bumper Biden stimulus package, has expectations high for a pick up in inflation, which has pushed up yields on US bonds in recent weeks. This caused emerging market bond funds to suffer their biggest outflows in almost a year in March as investors were drawn back to US debt.

Inflation has been muted this year despite rising global commodity prices: Annual urban inflation increased only slightly during the first quarter of the year, rising from 4.3% in January to 4.5% in March, despite a global backdrop of rising food and commodity prices. Food prices are now at highs not seen since 2013 while oil prices have recovered to pre-pandemic highs and metals are surging.

But inflationary risks will likely remain limited: The base effect and global commodity and raw material prices are likely to push inflation up in the medium term, but prices will likely remain within the central bank’s target range, El Swaify said. “We see inflation fluctuating just below 4% in 2Q2021 before rising to 5-6% y-o-y during the second half of the year, ending FY2020-2021 at an average of 4.5%,” El Swaify said. This is still short of the central bank’s 7% (± 2%) target range.

SPEAKING OF FX- Egypt’s foreign currency reserves can now cover over seven months of imports, Finance Minister Mohamed Maait said in a statement Wednesday. Egypt added another USD 140 mn to its reserves in March to end the month at USD 40.34 bn.


More good FX news: The Russians will be back in June

Direct flights between Russia and Egypt are set to resume in June, Russian ambassador to Egypt Georgiy Borisenko told Red Sea Governor Amr Hanafi yesterday. Russian tour operators have begun visiting the governorate to coordinate group trips for tourists, Hanafi told Kelma Akhira’s Lamees El Hadidi. There will also be twice-weekly flights between Hurghada and Moscow in addition to the resumption of charter flights to Egypt’s tourist resorts, according to the governor (watch, runtime: 6:25). Civil Aviation Minister Mohamed Manar Anba had initially suggested that flights could resume during the first week of May, while Russia’s Interfax agency said charter flights could return by 10 May.

This timeline could shift if the covid-19 situation takes a turn for the worse in Egypt or Russia, Borisenko said, noting that Russia is also looking at the pandemic alongside “security-related issues” at Egypt’s airports, according to Russian news agency Tass. Russia has made the resumption of flights to Egypt contingent on all tourism workers being vaccinated, Egyptian Hotels Association member Ramy Fayez said, according to Masrawy. The Health Ministry began inoculating tourism workers last month, with Minister Hala Zayed saying that tourism workers in Sharm El Sheikh and South Sinai are set to be fully vaccinated by the end of May.


Hassan Allam inks GEM management contract

It’s official: A consortium of companies led by Hassan Allam Holding (HAH) will provide and run services at the Grand Egyptian Museum (GEM) under an agreement signed with the Tourism Ministry last week, according to a cabinet statement on Wednesday. The contract was awarded through a tender that saw five consortiums compete for GEM’s management rights that finally wrapped up in March following over two years of negotiations. The bidding war was narrowed down to consortiums led by Hassan Allam and Kuwait’s Al Kharafi.

Who’s on board? The statement says UAE-based MAB Group, KCA London and Europe’s Avesta Group were among the international operators that would be working alongside Hassan Allam Holding. In addition to managing the complex, HAH will take over the finishing and other final touches for the museum’s service and commercial facilities, the statement said. An earlier statement said that the group is made up of several Egyptian, British, French, and Emirati firms who will be responsible for managing the site, operating the booking platform and the tours, and developing a promotion strategy.

When will GEM open its doors? The museum should be open to the public during the second half of 2021, provided covid is brought under control and vaccination programs run successfully, Tourism Minister Khaled El Anany said recently. Construction is already at least 98% complete, but an official opening will still need to wait due to the pandemic.

DIVE DEEPER: Check out our two-part Hardhat series on the Giza Pyramids development project: Part I | Part II.

ALSO FROM HASSAN ALLAM- Hassan Allam Utilities is developing 5 MW solar power plants to power a handful of Ridgewood Egypt’s desalination plants, after the two companies signed an agreement last week, according to a statement (pdf). The use of solar energy to power the desalination plants will make their operation more cost-efficient and sustainable, the statement notes, saying it is “one of the first projects of its type in Egypt” to source sustainable energy for desalination plants.


Nile Misr Healthcare eyes six potential acquisitions

Nile Misr Healthcare is currently doing due diligence on six potential investment targets, CEO Tarek Moharram told the local press. The USD 380 mn fund, launched last week by Misr Capital and Elevate Private Equity, is looking at companies in the fields of hospitals, labs, radiology centers and private medical ins., he said, adding that it will soon acquire one of “the most important” diagnostic companies in Egypt. The companies are targeting a USD 150 mn first close for the fund during 1Q2022 and are looking to invest in Egypt, Ghana, Nigeria, Kenya and Cote d’Ivoire, they said last week.

IPO on the horizon: Nile Misr Healthcare’s long-term ambition is to bring a number of its portfolio companies under the umbrella of a holding company, which would then be floated on the EGX, Moharram said.


Underage marriage = no welfare benefits

SMART POLICY- Financial support from the Takaful and Karama program could become contingent on families refraining from marrying off underage daughters under a new proposal by the Social Solidarity Ministry, Minister Nevine El Kabbaj said, according to Al Mal. The proposed amendments to the conditions of the programs would bar families who wed their daughters before the age of 18 from receiving state support, the minister said. El Kabbaj did not provide further details on the proposal or when it could come into effect. Takaful and Karama are one of Egypt’s most successful welfare programs, providing cash-based subsidies to eligible beneficiaries.


Another purge of Ikhwanis?

Civil servants with proven ties to the Ikhwan could face automatic dismissal under a proposed bill to be put to the House of Representatives as early as this month, Rep. Abdel Fattah Mohamed told Al Shorouk. Under the amendments to the Civil Service Act, those with suspected Ikhwan ties would be temporarily suspended from their positions while an investigation is conducted and would be permanently dismissed if these links are proven, Amin said. The law could be constitutional, he added, since the Ikhwan is designated as a terrorist group. The proposed amendments come after Transport Minister Kamel El Wazir claimed last week that “extremist elements” in the Railways Authority were responsible for the deterioration of the country’s rail network, said Rep. Amin Massoud.


Tough talk on GERD

Sudan is talking tough with Ethiopia, signaling it could seize control over the Grand Ethiopian Renaissance Dam if Addis Ababa does not commit to the Nile water-sharing pact it signed as “an independent state.” In a strongly-worded statement last week, Sudan said that disavowing the agreements by persevering with the second phase of the reservoir’s filling translates into “compromising sovereignty” over the Benishangul region, where the dam is being constructed. Benishangul was formerly a Sudanese province which Khartoum was forced to give up to Addis Ababa in a colonial agreement between Britain and Ethiopia at the turn of the 20th century. The pressure comes in response to a statement by Ethiopia’s Foreign Ministry last week accusing Egypt and Sudan of prolonging negotiations and calling current water-sharing agreements “unacceptable.”

Only a couple of days prior, Sudan seemed to be softening on mediation: The country’s foreign ministry spoke positively on the African Union’s current position as sole mediator between the three countries and said it would support its efforts to find an agreement. Mediation has been the key sticking point preventing talks from progressing, with Sudan and Egypt both calling for the US, EU and UN to join negotiations and Ethiopia demanding the AU continue as the sole middleman. Ethiopia’s ambassador to Sudan described Sudan’s statement as “a promising step” towards reaching an agreement on the dam’s filling and operation that satisfies all parties on Saturday.

Egypt is continuing to lobby for US involvement: GERD could “inflict incalculable socioeconomic and environmental harm downstream” and “exponentially increase the dangers posed by climate change,” Egypt’s ambassador to the US Motaz Zahran said in a piece for Foreign Policy, calling for the US to “encourage” Ethiopia to accept an agreement and save the “faltering” AU-led process.

AU Chairman Félix Tshisekedi could be paying Cairo, Khartoum, and Addis Ababa a visit “soon” to push for a resolution, Sudanese Foreign Minister Mariam Al Mahdi said after meeting with Tshisekedi to discuss the GERD negotiations yesterday, according to Sudanese state news agency SUNA.


Turkey wants a closer trade relationship with Egypt

Turkey wants to improve its trade relationship with Egypt “in parallel” with restoring diplomatic ties, Turkish Trade Minister Mehmet Mus told reporters Monday, following overtures in recent months that point to Ankara’s desire to patch up its rocky relationship with Cairo, Reuters reports. Mus’ statement comes ahead of an expected visit from a delegation of high-level Turkish diplomats to Cairo this week.

Are the Turks already in town? El Hekaya’s Amr Adib’s sources suggest that the Turkish delegation has either already landed in Egypt or is set to arrive today, the host said yesterday (watch, runtime: 4:04). The visit, which would be the culmination of a series of olive branches Turkey has offered us in recent months, follows talks between the two countries’ intelligence chiefs and foreign ministers, and Turkish Foreign Minister Mevlut Çavuşoğlu declared the dawning of “a new era with Egypt.”

Egypt is Turkey’s biggest trade partner in Africa, said the minister, with the value of trade between the two countries estimated at USD 486 bn in 2020, and remaining more or less consistent since the political rift between the two countries in 2013 following the ouster of Ikhwan president Mohamed Morsi.


Hyundai Rotem, NERIC to manufacture railcars in Egypt

South Korea’s Hyundai Rotem will partner with the National Egyptian Railway Industries Company (NERIC) to produce railcars in Egypt after the two signed an MoU on Wednesday, the Planning Ministry said in a statement (pdf). The company will set up plants in Egypt to manufacture railway cars, signaling systems, and control and driving equipment, in addition to providing railway engineering services, CEO Lee Young-Bae said. The agreement will also see the South Korean firm transfer technology to Egypt, and came a day after Lee and President Abdel Fattah El Sisi discussed locally producing railcars and signalling equipment, and cooperating over green hydrogen production.

A six-year plan: The government plans to reach a 25% local component quota for the nation’s railway system over the next two years as part of a six-year plan under President Abdel Fattah El Sisi’s directives. The strategy would see the local component quota at 50% after four years and 75% at the end of the six-year period.


AmCham Egypt has elected Tarek Tawfik (LinkedIn), chairman of the Cairo Poultry Group, as the new president for two years, Al Shorouk reports. Tawfik will succeed AUC School of Business Dean Sherif Kamel (LinkedIn). Apache Egypt General Manager David Chi (Bio) has been appointed the chamber’s vice president from the US side, while Tarek Mohanna (LinkedIn), a partner at MHR & Partners, has been appointed as the Egyptian vice president.

Ayman Farouk has been appointed head of investor relations at Heliopolis Housing and Development, the company said in a statement (pdf) last Tuesday.

Shahat El Ghatwary has been appointed as the head of the Customs Authority effective 1 May for a one-year term, the Finance Ministry said in a statement. He follows Kamal Negm who had served as the authority’s head since 2018.



The talking heads were preoccupied last night with recapping Egypt’s vaccination program and providing commentary on the latest in diplomacy, including our make-up with Turkey and the Grand Ethiopian Renaissance Dam tension, all of which we cover in the news well, above.

Sham El Nessim was a pretty quiet affair, Kelma Akhira’s Lamees El Hadidi (watch, runtime: 1:46) and Ala Mas’ouleety’s Ahmed Moussa noted (watch, runtime: 5:32). Both talking heads said that while it felt eerie to mark the day without the typical park outings, the spike in covid-19 cases made it necessary to clamp down on mass gatherings.


Dominating coverage of Egypt this morning in the foreign press: Four members of Egypt’s security services may be tried in Italy over their alleged role in the disappearance and killing of Giulio Regeni. Italian prosecutors last week asked a judge to allow the trial to proceed. A decision over whether the case goes to trial will now be made on 25 May after the judge postponed the hearing on Thursday due to one of the Egyptians’ lawyers testing positive for covid-19. Covering the story: Reuters | Associated Press | The Guardian.


Juhayna has lodged an official complaint with the Traffic Police over what it described as the “unjustified targeting” of its fleet, Reuters reports. The company says that traffic authorities regularly gather outside the company’s factory in Giza and have withdrawn licenses of 132 of the company’s vehicles, causing the company to suffer financial losses. The 6th of October traffic department has also allegedly prevented the company from renewing licenses for 65 of its vehicles. The company’s Chairman Safwan Thabet was arrested late last year amid allegations of ties to the Ikhwan; CEO Seif Thabet has also been detained

GOOD NEWS FOR FACTORIES: The Finance Ministry will fix electricity and gas prices for industry for the next three years, which would cost the state coffers EGP 10 bn, minister Mohamed Maait said in a statement as budget talks continue in the House of Representatives.


The US and Eurozone could return to pre-covid growth levels by the end of 2021, economists said, revising growth forecasts upwards after recently released figures showed stronger resilience than previously expected, the Financial Times reports. Previous IMF forecasts predicted a US recovery would not take place before mid-2022, but increased spending on the back of President Joe Biden’s USD 1.9 tn stimulus package has improved recovery prospects, economists say. The EU similarly did not record as large a contraction as predicted by the IMF, leaving it on track for a recovery during 2022.

Warren Buffett's Berkshire Hathaway returned to profitability in 1Q2021, posting net income of USD 11.7 bn compared to a loss of USD 49.7 bn a year earlier when the value of its stock investments plummeted on the back of the pandemic, according to an earnings release (pdf). Many of Berkshire’s subsidiaries have “experienced significant recoveries” and “the first quarter’s revenues and earnings for these businesses were considerably higher than in the first quarter of 2020,” Buffett said during a shareholder meeting on Saturday (watch, runtime: 5:13:53).

Berkshire resisted shareholder resolutions calling for it to report its efforts to address climate change and workforce diversity, despite growing calls among some of the world’s largest investors that climate disclosures should be a must for all companies, Reuters reports.

The Oracle of Omaha warns of incoming inflation: Buffett said his portfolio companies were “seeing very substantial inflation” in a range of sectors amid shortages of raw materials and high savings, signaling further price pressures in the US amid a “red hot” recovery from the worst of the coronavirus pandemic.




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USD 55,915.40


The EGX30 fell 1.1% on Wednesday on turnover of EGP 795 mn (37.8% below the 90-day average). Foreign investors were net sellers. The index is down 3.4% YTD.

In the green: Cleopatra Hospital (+1.6%), Fawry (+0.8%) and Orascom Development (+0.3%).

In the red: ElSewedy Electric (-3.1%), MM Group (-2.7%) and Oriental Weavers (-2.6%).


What more could Egypt be doing to tackle carbon emissions? Air pollution costs Egypt an estimated EGP 47 bn a year, according to the World Bank. To tackle this, multiple government-led programs are targeting carbon emissions reduction, with development finance and private sector support. But some analysts and business owners say more measures are needed, and are recommending a more ambitious renewables strategy, financial incentives to boost renewables, capping emissions of our most polluting industries, and using cleaner carbon capture technology.

Egypt’s renewables strategy seems ambitious — but some experts want to aim higher: Egypt remains reliant on hydrocarbon-based fossil fuels. Renewables comprise an estimated 10% of the energy mix, and the government aims to increase this to 42% by 2035. In its Egypt Renewable Energy Outlook 2018 (pdf), the International Renewable Energy Agency (IRENA) says it’s technically and economically feasible for Egypt to aim for 53% of power generation from renewable sources by 2030.

Targets for renewables — and coal — are outdated, say some studies. The government set its 42% renewables target in 2016, and introduced heavyweight polluter coal to reduce imported gas reliance following 2011-2013 electricity shortages, the IRENA report notes. Under this scenario, coal is set to comprise 16% of the mix by 2035, while under Egypt’s 2030 Vision (pdf), it is due to comprise 29% by 2030. But today we have surplus electricity, with our generation capacity of 58 GW exceeding our peak demand of 30-32 GW. This degree of fossil fuel-reliance could see Egypt’s CO2 emissions exceed 300% of current emissions within 10 years, the Euro-Mediterranean Journal for Environmental Integration study notes.

IRENA’s recommendations: Cut coal, and update the energy strategy every two years. Introducing coal into the energy mix hinders emission reduction efforts, the IRENA report notes. Egypt should update its energy strategy every two years, given rapid developments in tech and cost effectiveness of renewables.

Accelerating the renewables transition requires more financial support: Renewables are very cost-competitive, and some measures are already in place to help businesses cut costs. Cairo Solar currently pays no tariffs on solar panels, and low tariffs on inverters, says Managing Director Hatem Tawfik. Custom duties for renewable energy production or generation equipment can be as low as 2%, energy and environment analyst and Solutions Fellow at the Center for Climate and Energy Solutions Mahmoud Abouelnaga tells Enterprise. And phasing out electricity subsidies will be key to attracting foreign investors, he adds.

But a raft of other incentives could encourage more activity: Subsidized financing for solar companies of all sizes would boost the sector, says Tawfik. He wants VAT for solar companies reduced to 5% (down from the standard 14%) as well as more financing — bank loans and grants like the Egypt PV fund and the EBRD’s GEFF mechanism — for clients installing solar equipment.

Other recommendations? Stop treating small and mid-size projects as high-risk: Larger renewables projects often benefit from low interest rate loans, while small and mid-size projects are still seen as high-risk, says Abouelnaga, “though solar and wind costs have decreased remarkably in the last decade.” Smaller projects should be able to collectively apply for low interest rate financing, he suggests. “If there’s a 200 MW project financing cut-off, the 200 MW could come from several smaller projects grouped together, rather than one large 200 MW project.”

And keep building electricity transmission capacity: Conversations with DFIs like the World Bank should focus on building transmission capacity, Abouelnaga believes. “It’s a key question: what are we going to do with all our generation capacity if we don’t have transmission capacity? That’s where investments need to be scaled.” Establishing transparent and cost-reflective transmission charges is needed, says Heike Harmgart, EBRD Managing Director for the Southern and Eastern Mediterranean. “The ministry is making big strides on this. I expect in 2021 and 2022 we’ll see many more private-to-private agreements. We signed one of the first with Taqa Arabia last year. I think more are coming,” Harmgart said.

Meanwhile, heavily polluting industries need emission caps, says Abouelnaga. “Industries needing stricter enforcement — like cement and steel — will only limit their emissions through environmental policy restrictions.” Energy, agriculture, manufacturing, and waste handling and management are Egypt’s biggest emissions culprits.

What could help? Industrial clusters: Creating industrial clusters away from cities could help reduce emissions, with facilities sharing infrastructure, Abouelnaga says. “Lower-priced land or energy subsidies could be incentives. If the clusters were close to energy power plants, they’d feed into each other.”

And if slashing emissions doesn’t work? Industry can support renewables through carbon credits: Industrial producers can reduce their carbon footprint by donating to mega-renewable projects like Zaafarana, Egypt Green Building Council board member and sustainability consultant Hoda Ibrahim tells Enterprise. “Zaafarana is registered on the IRX, and factories can pay to offset the amount of electricity they consume annually.”

Would emissions caps for transport be helpful? Probably not yet: Egypt is investing heavily in urban transport networks but could still do a lot more in the transport sector to reduce carbon emissions, says Harmgart. And EBRD-supported pilots on electro-mobility and transitioning to lower carbon public and private transport are important steps in this area, she adds. “But I’m not sure an emissions cap on transport is currently the most efficient way to reduce emissions in Egypt. In some areas, a lot of work would be needed.”

But pinning all our hopes on a renewables transition or heavy polluters curbing emissions is unrealistic, Abouelnaga says. “When it comes to hard-to-decarbonize sectors, there’s a limit to what you can alter. You can’t change the chemical process for producing cement. Even if factories use clean energy, in producing cement, they produce CO2.” Significantly shifting away from fossil fuels might not happen soon, he adds. “We’re building natural gas combined cycle power plants, with a lifespan of at least 30 years. In terms of investment, we don’t want to wind that down.”

Carbon capture could be a solution: Implementing carbon capture technology is straightforward, and CO2 captured could be used for other industrial processes, including enhanced oil recovery — pumping CO2 down an oil or gas well to increase pressure — or manufacturing beverages, says Abouelnaga. Industrial facilities can be retrofitted with carbon capture devices as a relatively cost-effective way to keep fossil fuels in the energy mix, with minimal CO2 emissions, he adds.

But the tech isn’t really on Egypt’s radar yet: The UAE, UK and Norway are all making strides in carbon capture technology, says Abouelnaga. “The tech is getting a lot of attention. But it doesn’t seem to be in Egypt’s strategy at all.” Carbon capture is still an expensive decarbonization solution in Egypt, notes Harmgart. “There are lots of cost-competitive technologies that have become mainstream and accessible, like solar and wind. Others, like green hydrogen and solar-powered desalination, have tremendous potential. But we need to be open about all decarbonization solutions.”

Your top climate stories for the week:

  • UAE wants in on Israel’s natgas resources: Israel’s Tamar offshore field, which supplies Egypt with natural gas under a 2018 agreement, could be getting a new shareholder as Delek Drilling — one of the field’s owners — moves to sell its 22% stake to the UAE’s Mubadala.
  • Natgas vehicles: The MSME Development Agency and Gastec converted 9.5k cars to run on natgas in 1Q2021 at an estimated cost of EGP 75 mn.
  • Green tech: The Higher Education Ministry has launched the first incubator program for clean and green technology in Upper Egypt.


13-15 May (Thursday-Saturday): Eid El Fitr (TBC).

16-19 May (Sunday-Wednesday): The Arabian Travel Market (ATM) takes place in Dubai.

25-28 May (Tuesday-Friday): The World Economic Forum annual meeting, Singapore.

1 June (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

7-9 June (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

17 June (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

17-20 June (Thursday-Sunday) : The International Exhibition of Materials and Technologies for Finishing and Construction (Turnkey Expo), Cairo International Conference Center.

24 June (Thursday): End of the 2020-2021 academic year (public schools).

26-29 June (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center, Cairo, Egypt.

30 June (Wednesday): 30 June Revolution Day.

30 June- 15 July: National Book Fair.

July + August: Thanaweya Amma exams take place.

1 July: (Thursday): National holiday in observance of 30 June Revolution.

1 July (Thursday): Large taxpayers that have not yet signed on on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

19 July (Monday): Arafat Day (national holiday).

20-23 July (Tuesday-Friday): Eid Al Adha (national holiday)

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

5 August (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

9 August (Monday): Islamic New Year.

12 August (Thursday): National holiday in observance of the Islamic New Year.

12-15 September (Sunday-Wednesday): Sahara Expo: the 33rd International Agricultural Exhibition for Africa and the Middle East.

16 September (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 September-2 October (Thursday-Saturday): Egypt Projects 2021 expo, Egypt International Exhibition Center, Cairo, Egypt.

30 September-8 October (Thursday-Friday): The 54th session of the Cairo International Fair, Cairo International Conference Center, Cairo, Egypt.

1 October (Friday): Expo 2020 Dubai opens.

6 October (Wednesday): Armed Forces Day.

7 October (Thursday): National holiday in observance of Armed Forces Day.

12-14 October (Tuesday-Thursday) Mediterranean Offshore Conference, Alexandria, Egypt

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

28 October (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

29 November-2 December (Monday-Thursday): Egypt Defense Expo

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

16 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.

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