Tuesday, 8 June 2021

More Chinese jabs, coffee with France’s ambassador + kicking microbuses from the Ring Road

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, everyone, and welcome to another brisk news morning. What appears to be a continued strong rollout of our vaccination program leads today. If you’re thinking long-term, suggest having a good read through our Going Green interview with French Ambassador Stéphane Romatet as well as the piece on Russia’s wannabe alternative to the Suez Canal.

EDITOR’S NOTE: EnterprisePM will be taking a publication holiday this afternoon so we can attend to some housekeeping and plug away at some long-term stuff about which we’re really excited. EnterpriseAM and EnterprisePM will be back in your inboxes at their customary times tomorrow.

THE BIG STORY INTERNATIONALLY- Jeff Bezos is going to space, announcing yesterday that he will be hopping aboard his company Blue Origin’s first mission next month. The 20 July flight will feature an 11-minute trip to suborbital space that will reach an altitude of about 100 kms. Bids for a seat on the flight have gone as high as USD 2.8 mn. The story is everywhere in the foreign press from Bloomberg and the Associated Press to CNN, the Financial Times and CNBC.

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

  • We talked to Openner’s Ahmed Elsherif about what the VC firm has up its sleeve for Egypt. The VC is on the lookout for stakes in as many as 50 tech startups, with USD 5 mn earmarked for Egypt at an initial stage
  • UAE’s Opontia will soon set up shop in Egypt and has USD 20 mn to invest. Egypt could receive some of the USD 20 mn Riyadh-based consumer holding startup Opontia has earmarked for regional acquisitions.
  • JUFO signals to the market that its financials are sound: Juhayna Food Industries has released a snapshot of its unaudited FY2020 earnings in a move likely meant to reassure investors after the company was placed on the EGX’ ‘D-list’ of non-compliant companies last week for missing the 1 June deadline to report FY2020 results.

WHAT’S HAPPENING TODAY-

A delegation of 18 French companies are currently in town to meet Egyptian private sector firms and international financial institutions in an event organized by Business France. The visit wraps up tomorrow.

The long-awaited Sovereign Sukuk Act could get a final nod by the House as early as today, paving the way for the issuance of our maiden sharia-compliant bonds on local and international debt markets, Rep. Yasser Omar told Reuters.

The worst case scenario: A final vote on the bill, which earned preliminary approval from the House on Sunday, could be held later this month before the start of the new fiscal year, Omar said. It would then be handed over to the president to be signed into law. Once ratified, the executive regulations for the bill are expected to be issued within three months.

The ministry is eager to get the ball rolling, saying in a statement yesterday that it will start working on its first issuance as soon as the legislation takes effect. The exact timing and size of the planned offering remains unknown.

The bill sets a framework for regulating Egypt’s sovereign sukuk issuances, including/ governing how sharia-compliant debt is securitized and traded.

Need a refresher on how sukuk work? We’ve got you covered.


Don’t celebrate (or gnash your teeth over) the global corporate tax agreement just yet: There’s a long way to go. An agreement by G7 nations to introduce a 15% global minimum corporate tax rate still has a “long road” ahead of it, according to experts speaking to CNBC. Finance ministers are already facing criticism that the proposal isn’t ambitious enough and that more countries will need to come on board if the proposal is going to make a difference.

The critics have a point: Amazon, one of the largest companies in the world, could avoid having to pay more tax thanks to a part of the agreement that forces only companies with a 10%+ NP margin to comply, according to the Guardian. Some campaigners say that a minimum rate would have to be higher to make a difference, while others have criticized the agreement for allowing the continued existence of tax havens.

Then there’s the problem of implementation: The plan, agreed in principle last weekend, only involves Canada, France, Germany, Italy, Japan, the UK, the US and the EU, and would require more countries and closer coordination to properly close tax loopholes enjoyed by multinationals.

The long road: The G7-backed agreement will need confirmation at a meeting of G20 members in July. It will then require even broader negotiations at the OECD, a process French Finance Minister Bruno le Maire said might take two to three years.

CIRCLE YOUR CALENDAR-

Inflation data for May will be released this week.

Egypt is hosting the Africa Investment Promotion Agency Network’s first forum at the end of this week. The four-day event kicks off on Friday.

The Egypt Green Economy Forum takes place next Monday, 14 June.

The Central Bank of Egypt will meet Thursday, 17 June to review rates.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

enterprise

*** 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 sit down with Stéphane Romatet, French ambassador to Egypt, to discuss France’s support for Egypt’s green energy plans. French investment in Egypt has grown from an estimated EUR 3 bn in 2017 to EUR 5 bn today. And renewables investment — currently comprising some EUR 500 mn — is becoming an increasingly important focus. Our conversation tackles France’s ambitions to partner with Egypt on green hydrogen — where French companies are eyeing more renewables investment in Egypt — and the importance of resolving the feed-in tariff issue.

enterprise

COVID WATCH

More Chinese jabs have arrived + Is the UK claiming a Thai variant came through Egypt?

Egypt took receipt yesterday of a 500k-dose shipment of China’s Sinovac vaccines, coming almost a week before our first batch of locally-manufactured Sinovac shots is finished on 15 June, the Health Ministry said in a statement. Minister Hala Zayed had said last week that this shipment will be followed by a separate 500k dose batch on 16 June. Sinovac is one of two vaccines Egypt will manufacture, aiming to produce the first 3 mn doses as early as this month through state-owned Vacsera.

A 1 mn-dose shipment of Sinopharm jabs will arrive in the country on Sunday, 13 June, Health Ministry spokesperson Khaled Megahed told Al Hayah TV last night (watch, runtime: 11:11).

As many as 4 mn shots of other covid vaccines are set to land here at home before the month is out, including a 1.9 mn doses of Oxford / AstraZeneca through the Gavi / Covax scheme that was expected to arrive in the first week of June. Johnson & Johnson is also sending 20 mn doses of its single-shot jab. These doses would be separate from the shots we could be receiving through Covax and from the 4 mn doses that are said to be delivered in 4Q2021, which will likely be received through the African Union.

Next up on Egypt’s vaccination priority list: Tourism workers in Luxor + Aswan. The ministry plans to begin administering covid-19 shots to tourism workers in the tourist hotspots on 1 July, Zayed said in a phone interview with El Hekaya (watch, runtime: 1:28). This comes after the government concluded the vaccination of all Red Sea tourism workers in the last week of May.

The Health Ministry reported 782 new covid-19 infections yesterday, down from 801 the day before. Egypt has now disclosed a total of 268,754 confirmed cases of covid-19. The ministry also reported 47 new deaths, bringing the country’s total death toll to 15,399.

Perhaps this is why the UK put us on its red list: According to the UK government, British health authorities are investigating a variant of the coronavirus that originated in Thailand but entered the country from Egypt. The idea was strongly denied by a member of the Health Ministry’s covid committee on Kelma Akhira last night, who claimed that Egypt has so far not detected any of the more transmissible and virulent covid variants.

TELECOMS

Hello, cash cow

Vodafone Egypt will make a one-off EGP 10 bn dividend payout this year as part of a modified shareholder agreement signed by Vodafone Group and Telecom Egypt (TE) yesterday, TE said in a statement. This includes the EGP 2 bn cash dividend Vodafone Egypt made earlier in the year, EGP 900 mn of which went to TE. The remaining EGP 8 bn will be paid out later in 2021.

And there are permanent changes to dividends going forward: Vodafone Egypt will pay out a minimum 60% of its cashflow in dividends in the future, according to the new terms of the agreement.

What else is changing? Vodafone Group now has the right to transfer its 55% stake in Vodafone Egypt within the wider group, while TE has received “certain enhanced minority rights including access to information.”

Advisors: Al Tamimi & Company advised TE in its negotiations with Vodafone Group, the law firm said (pdf).

What’s going on here? The law firm said that the agreement has been three years’ in the making, and aims to promote “mutual protection … and exit rights” for both shareholders. Vodafone, TE and Al Tamimi were all unavailable for comment on the new agreement.

This comes six months after Saudi Telecom’s (STC) bid to buy Vodafone Group’s stake ended in failure. Vodafone Egypt was the subject of a drawn-out acquisition bid from STC, which was in talks with Vodafone Group to acquire its majority stake for USD 2.4 bn for most of last year. Negotiations ended without an agreement in December for unknown reasons.

M&A WATCH

Ahmed Ezz takes direct controlling stake in Ezz Steel

Ahmed Ezz now directly owns a controlling stake in Ezz Steel after purchasing a 33.4% stake in the company from El Ezz Group Holding for Industry and Investment, according to an EGX disclosure (pdf). The steel magnate, who owns almost 100% of Ezz Holding, now directly holds a 65.7% stake in Ezz Steel after purchasing almost 182 mn global depository receipts from the affiliated company. This comes less than a month after Ezz purchased a 5.6% stake in Ezz Steel, again from Ezz Holding.

*** A MESSAGE FROM IDG ***

enterprise

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REAL ESTATE

TMG does another JV with state-owned banks

The National Bank of Egypt (NBE), Banque Misr and Talaat Moustafa Group (TMG) have established a new real estate joint venture, dubbed Rawasi, with paid-in capital of EGP 200 mn, NBE Deputy Chairman Yehia Abou El Fettouh told Masrawy.

What’s in the pipeline? The new company obtained a EGP 9 bn joint loan from both banks to develop assets in TMG’s Madinaty compound, Abou El Fettouh said.

This is the second real estate JV TMG has set up with NBE and Banque Misr: In late 2020, TMG established its first JV with both state-owned banks to develop the pair's residential lands worth EGP 5 bn in TMG’s Madinaty and Rehab compounds. Four other banks later bought into the JV, including Suez Canal Bank, Export Development Bank of Egypt, United Bank and the Egyptian Gulf Bank. CIB and TMG also established in 1Q2021 a real estate SPV, dubbed TCA Properties, to acquire, sell and lease commercial properties.

SUEZ CANAL

The Suez Canal could face competition from Russia in three years

Russia could be mainstreaming its Suez Canal-alternative shipping route in 2024. Russian energy firm Rosneft is looking to start shipping oil products from its planned megaproject, Vostok Oil, through the Northern Sea Route in three years’ time, Reuters reports. The energy project, which would have an average 6.2 bn tonnes of oil in resources, would challenge the Suez Canal by cutting travel distances between Europe and Asia. Vostok Oil is one of Russia's biggest oil projects, comparable in size with the exploration of West Siberia in the 1970s and the US Bakken oil region over the past decade.

Moscow has already tried to capitalize on the Ever Given debacle, claiming that the six-day blockage in March demonstrated that the Northern Sea Route is more reliable and safe than Suez. Russia said previously that it plans to make the route viable year-round (rather than only between July and October) by 2030, and that it could cover ins. for commercial shippers taking on risks of possible supply disruptions.

Russia isn’t our only competitor: Israel and the UAE are in talks to create a land bridge between the two countries to ship Emirati oil through Israel to Europe, bypassing the Suez Canal. Chairman of the Suez Canal Authority Osama Rabie has suggested that the project poses a national security risk to Egypt. Nearly 66% of oil sent from the GCC to western countries is shipped through the Suez Canal or the Sumed pipeline linking Alexandria to the Red Sea.

Are Arctic routes really competitors? The Northern Sea Route (NSR) and the Northwest Passage both promise faster shipping times, but face a range of limitations compared to the Suez Canal. The largest ships that can run through the NSR — so-called Arcticmax ships — can carry less than a fifth of the 25k shipping containers that the biggest ships to transit the Suez Canal can carry. The weather can be very challenging, the challenges to navigation numerous, and there’s a lot less infrastructure when things go wrong, from rescue infrastructure to recovery services. Check out The drawbacks of Arctic shipping in Global Risk Insights, Challenges and [upsides] of the Northern Sea Route in the Maritime Executive and this piece from 2015 in the Journal of Transportation Security as starting points.

Suez Canal revenues are an important source of hard currency for Egypt, bringing in USD 5.8 bn in FY2019-2020.

TRANSPORT

Microbuses to be banned from the Ring Road this year

The Ring Road is going to become slightly less chaotic: Microbuses will be banned from driving the Ring Road later this year when work to expand the capital’s most important freeway wraps up this December, head of the General Authority for Roads and Bridges Hossam El Din Moustafa said Sunday in a phone-in to Al Hadath Al Youm (watch, runtime: 5:05).

Hello BRT: Buses that will eventually operate under the proposed bus rapid transit (BRT) system will replace microbuses as the main mode of public transport on the Ring Road, which will see buses run regular routes with designated stops at intersections, Moustafa said. The system is hoped to ease traffic congestion as well as reduce the use of private cars and on-road parking of microbuses.

But what about intercity travel? Moustafa didn’t disclose whether the microbus ban would extend to vehicles making trips outside of Cairo.

A BRT is more than just buses: A consortium of local and international firms — led by French public transport company TransDev and including Orascom, Mwasalat Misr and MCV Group — last month agreed to study the proposed system, which would include the buses, an electronic ticketing system, pedestrian crossings, bus stops, and information services. BRTs in other countries allocate designated lanes for buses, allow commuters to purchase tickets ahead of the trip, and feature platform-level boarding for ease of access.

MOVES

Memphis and Marsa Alam have new management

Marsa Alam Tourism Development has appointed Shahinaz Salem as its new chairperson and managing director, the company announced in a statement (pdf). Salem previously served as the chair of Al Ahram for Printing and Packaging.

Memphis Pharma and Chemical Industries has appointed Essam Sadek as its non-executive chairman to replace Abla Hassan, who will now act as the company’s executive director, the company said in a statement (pdf).

enterprise

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

Covid once again dominated proceedings on the nation’s talk shows last night: We have coverage on the night’s events in this morning’s Covid Watch, above.

The big business-relevant stories of the night:

The introduction of VAT on online delivery services got attention. All restaurants and businesses with more than EGP 500k in annual revenues are now charging and remitting VAT on online delivery services, under amendments to the executive regulations on the VAT Act, effective since last Thursday. Kelma Akhira’s Lamees El Hadidi wondered whether small businesses that don’t have to file VAT returns could charge customers the 14% duty and keep the money for themselves (watch, runtime: 4:54). Director of taxpayer services at the Egyptian Tax Authority Mohsen El Gayar, however, said that the changes will only impact individual shops and traders who were previously not required to collect and remit VAT on delivery services under the original VAT Act.

Elsewhere: Finance Minister Mohamed Maait told Ala Mas’ouleety in an extended, policy-light interview how Egypt has recovered from potential bankruptcy in 2014 to being an economically prosperous country today. You can watch the entire interview here (watch, runtime: 35:32).

EGYPT IN THE NEWS

Politics is the flavour of the morning in the foreign press: The Hill says that Egypt is emerging as an influential powerbroker in the region, coming off diplomatic achievements in Gaza, Libya and Syria. Sputnik suggests that Egyptian diplomats are looking at political developments in Israel with pessimism, expecting a government led by far-right leader Naftali Bennett to make resolving the conflict with Palestine even more difficult.

Also getting attention:

  • An anti-Qatar hashtag was trending on Twitter in Egypt last Saturday — on the fourth anniversary of the 2017 blockade — with users criticizing the Gulf country. (Doha News)
  • Bedouins find peace in Sinai's solitude: Bedouins have held tight to their land across Sinai in the face of the 20th century Israeli occupation, poor infrastructure, and myriad of other challenges. (National Geographic)

ALSO ON OUR RADAR

A money market fund recently launched by Misr Life Ins. was almost 5x oversubscribed at close this week, attracting more EGP 470 mn in inflows, Misr Capital said in a statement (pdf). The Misr Life Ins. Investment Fund had a target closing of EGP 100 mn. Managed by Misr Capital, the fund will invest in high-liquidity assets such as treasury bills and short-term corporate debt. Misr Capital is also managing a similar type of fund launched by Sarwa Life Ins. earlier this year.

PLANET FINANCE

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ETFs see record inflows in 2021: Inflows into exchange-traded funds have accelerated at a record pace so far this year thanks to retail investors pouring into the market, the Financial Times reports. ETF inflows have reached USD 305 bn in 2021, far above the USD 249 bn invested through the whole of 2020, according to research firm CFRA.

Are retail investors (paradoxically?) smoothing out market volatility? A 5% decline in US stocks normally happens c. three times each year, but no pullbacks have occurred in the past seven months, a lack of volatility analysts attribute to retail investors, who don’t seem to be deterred by sell-offs and move to buy the dip. “Whenever there is an immediate drawdown in equities, retail comes in immediately to buy the dip,” says one analyst. “People default to ETFs as a way to buy the dip. And recently retail has been buying more ETFs than any other segment of the equity population.”

The world is expected to remain in the grip of the global chip shortage until at least mid-2022, with high demand for vehicles and consumer electronics expected to continue into next year, a leading electronics manufacturer has said, according to the Financial Times. “Some are expecting [shortages to continue] into 2023,” said a procurement and supply chain officer at Flex, the world’s third largest electronics contract manufacturer. This has forced car and consumer electronics companies to adopt new approaches to secure their supply, such as paying for semiconductors in advance and purchasing chip plants.

What we’re hoping for: The forecast could get brighter if covid-19 vaccinations lead consumers to spend more on services and less on electronics, the salmon-colored paper says.

BP expects oil demand to go from strength to strength: A strong recovery in global crude demand is imminent and will last for a long time, CEO Bernard Looney told Bloomberg. His comments come as Brent crude rose above USD 70 a barrel last week for the first time in more than two years. A report from Standard Chartered suggests that this month and July will see oil demand recovery “at the point of maximum velocity.”

But OPEC+ countries are taking a cautious approach, with the Saudi Energy Minister saying he will believe the heightened demand predictions when he sees them playing out on the ground. The coalition of oil producing countries agreed last week to add over 800 bbl/d to supply in July, as part of a gradual easing of cuts made last year to protect oil prices from a supply glut during covid-19.

Crypto scams are on the rise due to the absence of industry regulations and the anonymity of digital tokens, the Wall Street Journal reports. Consumers lost some USD 82 mn to fraudsters during 4Q2020 and 1Q2021, a ten-fold increase from the same period a year earlier, according to the Federal Trade Commission. The commission’s figures are based on self reporting and focused only in the US, so the actual figure of money lost to crypto scams is likely to be much higher worldwide.

Down

EGX30

10,105

-0.2% (YTD: -6.8%)

None

USD (CBE)

Buy 15.64

Sell 15.74

None

USD at CIB

Buy 15.64

Sell 15.74

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

10,719

+0.3% (YTD: +23.4%)

Up

ADX

6,646

+0.3% (YTD: +31.8%)

Up

DFM

2,839

+0.7% (YTD: +13.9%)

Down

S&P 500

4,226

-0.1% (YTD: +12.5%)

Up

FTSE 100

7,077

+0.1% (YTD: +9.6%)

Down

Brent crude

USD 71.49

-0.6%

Up

Natural gas (Nymex)

USD 3.10

+1.0%

Up

Gold

USD 1,901.60

+0.2%

Down

BTC

USD 34,188

-3.9% (as of midnight)

The EGX30 fell 0.2% at today’s close on turnover of EGP 1.71 bn (24.2% above the 90-day average). Foreign investors were net sellers. The index is down 6.8% YTD.

In the green: Oriental Weavers (+6.2%), TMG Holding (+5.2%) and Telecom Egypt (+4.0%).

In the red: Fawry (-3.3%), CIB (-1.8%) and GB Auto (-1.8%).

It’s a mixed picture in global markets so far this morning, with the Kospi alone among major Asian indexes to be in the green. Futures suggest a mixed open in Europe later this morning — and see the Dow in the red, Nasdaq and S&P in the green at the opening bell on Wall Street.

AROUND THE WORLD

UAE turns to culture in latest move to diversify away from oil: Abu Dhabi plans to pump USD 6 bn into cultural and creative industries over the next five years, in the emirate’s latest strategy to shift away from its reliance on oil and gas, a senior tourism official tells the Financial Times. Having already invested USD 2.3 bn into industry-related projects, the emirate will ramp up spending on cultural heritage, the arts, media, and architecture as it looks to boost cultural industries’ contributions to GDP.

greenEconomy

Enterprise talks to: French Ambassador Stéphane Romatet on building a greener Egypt: French investment in Egypt has grown from an estimated EUR 3 bn in 2017 to EUR 5 bn today. Major renewables investments include Engie’s 250 MW Ras Ghareb wind farm; EDF’s 130 MW Benban solar plants; Total Eren’s two 63 MW PV Benban solar projects; and Artelia’s 2.4 GW hydroelectric project. The French Agency for Development (AFD) has provided EUR 800 mn in loans to Egypt’s renewable energy projects since 2007, and nearly EUR 400 mn in climate financing through credit lines to the banking sector since 2015.

We sat down with Stéphane Romatet, French Ambassador to Egypt, to discuss France’s support for Egypt’s green energy plans. The discussion touched on France’s ambitions to partner with Egypt on green hydrogen, where French companies are eyeing more renewables investment in Egypt, and the need to resolve the feed-in tariff issue.

Edited excerpts from our conversation:

Current French investment in Egypt is an estimated EUR 5 bn. Renewables comprise 10% of that mix. Energy investments are growing from big players like Total Eren, EDF and Engie, says Romatet. SMEs like Mascara and Naldeo are also eyeing the sector. Current French investment in renewable energy in Egypt is nearly EUR 500 mn.

Increasing overall investment is a priority: France wants to expand its investment in Egypt. Strategic sectors include infrastructure, transportation and energy. “We want more French companies to invest in Egypt. The AFD could support them by providing financing,” Romatet says.

Renewables could make up 20% of French investment in Egypt within five years: “Targeting 20% is reasonable given our planned projects in solar energy, wind farms, and biomass — and the long-term promise of hydrogen,” he says.

Hydrogen is strategically important for France, and Egypt is its major international partner: Hydrogen is key to France’s post-covid recovery plan. EUR 7 bn is earmarked for France’s green hydrogen development — hydrogen made without fossil fuels — by 2030, says Romatet. Egypt is the only country France is currently eyeing international cooperation on hydrogen with, Romatet believes.

France is helping Egypt plan its national hydrogen strategy: French and Egyptian specialists, including regulators and electricity ministry representatives, are developing Egypt’s national hydrogen strategy, says Romatet. France is ready to pay for consultants to help with this process. It’s outlined the capacity of its energy companies in hydrogen, says Romatet, and will develop terms of reference with the Egyptian government for Egypt’s national hydrogen strategy, due to launch by 2030.

French companies including Engie, EDF and Voltalia are prioritizing investment in Egypt’s renewables, says Romatet. Engie is in talks with the electricity ministry to finalize the power purchasing agreement for its 500 MW BOO wind farm in the Gulf of Suez. “They want to finalize everything this year, to launch the project in 2022,” Romatet says. EDF Renewables is preparing for the next round of auctions for new solar projects. And Voltalia is eyeing new solar and wind investment.

Even with the focus on Ras Ghareb, solar is attractive: Current heightened interest in wind projects is partly because industry leader Engie terms the Red Sea one of the best global locations for wind energy, Romatet says. But land availability, a big factor in solar investments, has also slowed down recently. When new land becomes available, we can expect to see more solar investment, he adds.

How helpful are renewable investments, given Egypt’s electricity glut? Well, surplus electricity is good for Egypt’s energy hub ambitions. Egypt’s current 40% overcapacity opens up possibilities for export, while leaving wide enough margins to absorb growing domestic demand, says Romatet. “Egypt will play an important role in meeting Europe’s energy security needs.”

But much depends on its ability to export — which is still oil and gas reliant: Egypt’s oil and gas export capacity is clear, Romatet notes. But geopolitical maritime boundary issues with Cyprus and Turkey also complicate this export process, he adds.

Egypt needs time to absorb additional capacity from renewable projects: New phases of renewable energy projects, including Ras Ghareb 2 and Kom Ombo, must be planned with domestic demand and export possibilities in mind. “The elements must be balanced. Why would investors or the Egyptian authorities invest in capacity that isn’t currently needed?” Renewable projects also take time to reach maturity, he adds. “There isn’t a slow down, but we’re seeing absorption of this first phase of projects.”

Fixing the FiT is key to driving investment, says Romatet. The Egyptian authorities are working hard to fix the feed-in tariff — especially for solar — at the correct price. Ensuring it’s low enough to be affordable but substantial enough to attract foreign investors is a balancing act, but resolving it is crucial, he says.

While issues around transmission and storage also need addressing: Transmission and storage capacity can also be constraints for French renewable energy companies. “Transmission is a monopoly, and storage is technologically challenging. Addressing storage capacity will be one of the key elements of the hydrogen strategy.” Still, some solutions are underway, like Voltalia developing storage solutions for solar energy.

Where else could French green investment grow? Energy efficiency and transition: EDF and Schneider will continue to focus on heightening the efficiency of their distribution networks, says Romatet. Schneider could be eyeing more electricity distribution command centers. French consultancy firms like Artelia and Naldeo want to increase their energy transition work — helping companies move towards carbon neutrality.

And possibly desalination: Both Suez and Engie are interested in the government’s desalination program. Mascara, which offers decentralized solar-power desalination technology, is also eyeing the market, says Romatet. Artelia is already involved in three desalination projects in New Mansoura, Galala, and Port Said. Desalination must be connected to hydrogen production because hydrogen is water intensive, he adds.

Beyond private sector investment, AFD offers grants and loans: Egypt’s hydrogen development strategy study could be financed through an AFD-French treasury grant, says Romatet. AFD’s funding mechanism, Proparco, financed the three French companies involved in Benban through direct loans, he adds.

Technical assistance to financial institutions could drive financing to the green economy: Egypt’s a liquid country, with accessible financing facilities, says Romatet. But providing technical assistance so financial institutions understand how to evaluate credit for green energy projects could help improve the culture of lending, he adds.


Your top climate stories for the week:

  • Green financing: The European Bank for Reconstruction and Development will provide USD 100 mn to the National Bank of Egypt to on-lend to green SME projects.
  • Water desalination: A consortium of Orascom Construction and Metito handed over a USD 130 mn seawater desalination plant in East Port Said.
  • Environmental awareness: The environment and tourism ministries launched a campaign to raise awareness on marine conservation in the Red Sea.
  • Structural reforms: The green economy and clean energy “remain of primary importance” in a new raft of planned structural reforms.
  • Climate transition: The pandemic has accelerated the need to boost the digital and green transformation, OECD chief economist Laurence Boone said last week.

CALENDAR

7-9 June (Monday-Wednesday): A delegation of 18 French companies will meet with international financial institutions and Egyptian private partners in an event organized by Business France The event will take place at Sofitel Gezirah.

11-14 June (Friday-Monday): Egypt is hosting the first forum of the heads of African investment promotion agencies from under the theme Integration for Growth.

14 June (Monday): Egypt Green Economy Forum.

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.

20 June (Sunday): Ismailia Economic Court to hold hearing on Ever Given compensation case.

22-27 June (Tuesday-Sunday): The CIB PSA World Tour Finals for 2020-2021 will take place in Cairo.

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. The Big 5 Egypt Impact Awards will also be taking place at the event on 27 June.

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

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 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.

1 July (Thursday): Businesses importing goods at seaports will need to file shipping documents and cargo data digitally to the Advance Cargo Information (ACI) system.

15 June (Saturday): EGX-listed will have to complete filing their financial disclosures for the period ended 31 March.

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

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

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

2-4 August (Monday-Wednesday): Egypt is hosting the Africa Food Manufacturing exhibition at the Egypt International Exhibition Center.

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 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.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

1H2022: The World Economic Forum annual meeting, location TBD.

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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