Wednesday, 2 February 2022

AM — FinMin’s Kouchouk on the Fed, our sovereign sukuk and how we got back onto JPM’s EM bond index



Good morning, friends. We’re drinking from a fire hose of news this morning, with tons of news on everything from privatization (hello, EGX) to an exclusive sit-down with the Finance Ministry’s Ahmed Kouchouk — with stops at the green economy, Planet Startup and subsidy policy in between. Let’s jump right in:

THE BIG STORY HERE AT HOME- The government is looking to list “as many state companies as possible” on the EGX in 2022, PM Moustafa Madbouly said yesterday during a follow-up meeting on the state privatization program, according to a cabinet statement. The meeting looked at the list of companies that could debut before the end of June, as well as preparations for the IPOs of military-owned firms (think: Safi and Wataniya). The PM’s remarks come after Finance Minister Mohamed Maait on Monday said the privatization program would resume in March, and days after Planning Minister Hala El Said revealed plans to sell stakes in state-owned companies every month or two

Likely up to list or offer more shares this year: Heliopolis Housing and Development (which is eyeing a secondary offering) and state fertilizer producer Mopco. Misr Ins. Holding subsidiary Misr Life Ins. is looking at an IPO, and perennial candidate Banque du Caire could also make its EGX debut.

The caveat: As always, IPO windows open and close with global market conditions — and things are looking a bit choppy globally this winter.

ALSO FROM CABINET- Replacing bread subsidies with EGP handouts could add to inflationary pressures, Supply Minister Ali El Moselhy was quoted as saying in a Reuters interview, adding that "when inflation is stable, then you can introduce cash.” Handouts ringfenced specifically for bread would be Moselhy’s preferred option, he added. The ministry is discussing several scenarios to rework the expensive bread subsidy system and expects to announce its plans by the end of March.

WATCH THIS SPACE- The Finance Ministry is mulling whether to lower the mandatory 0.25% tithe on corporate revenues that funds (in part) the universal health ins. program, Al Borsa quotes Finance Minister Mohamed Maait as having said.


The 6% fee hikes for most ships transiting the Suez Canal came into effect yesterday as scheduled, Suez Canal Authority head Osama Rabie said in a statement. LNG carriers and cruise ships are exempt from the increase, which comes as the authority starts to wind down a range of pandemic-era incentives and reductions

Suez Canal revenues rose 10% y-o-y in January to record USD 544.7 mn, Rabie added.

Revenues have been on the up for some time — hitting a record USD 6.3 bn in 2021 — amid a global supply chain crunch that has seen shipping costs soar.

PSA- We’re in for a few days of wind + rain: Wind will pick up across Greater Cairo, Upper Egypt and the North Coast tomorrow and Friday, bringing light to moderate rainfall to parts of the country, the national weather service forecasts


Putin speaks on Ukraine — and it’s not what the West wanted to hear. Russian President Vladimir Putin has accused the US of trying to lure Russia into a war over Ukraine, breaking a near-six week silence on the escalating Ukrainian crisis. Putin claimed that the US was using Ukraine as a “tool” to impose sanctions that would dent Russia’s development, while ignoring Russian demands for a promise that its neighbor would not become a NATO member.

An alternative explanation for the rising tensions: Putin has sent more than 100k troops to the Russia-Ukraine border in recent weeks. US officials urged Russia to pull back from the border and return to diplomatic negotiations in response to his latest comments.

Everyone and their mother had coverage of the developments, from Reuters and the Financial Times, to the Washington Post, the New York Times, and the Associated Press.

ON A RELATED NOTE- The Netherlands received its first ever LNG shipment from Egypt on Monday via the recently reopened Damietta LNG Plant, as Europe continues to suffer from an energy crisis that sees it attempt to diversify its gas imports. That bid for new supply will only get worse if Russia turns off the taps.


Swvl is now set to close its merger with blank-check firm Queen’s Gambit in either February or March, company CFO Youssef Salem said, confirming a report in Al Mal. The transaction is waiting on final approval from US regulators, he added. Streaming platform Anghami, meanwhile, has a deadline to close its SPAC with Vistas Media Acquisition Company by 11 February.

OPEC+ is set to agree on more gradual production increases in its meeting today, Bloomberg reports.

Laughing all the way to the bank: ExxonMobil and Chevron, which saw earnings rise to levels not seen in eight years in 2021 on the back of spiraling crude prices. Shell and BP are expected to follow suit when they reportlater this week, the Wall Street Journal reports. Brent crude prices threaten to break the USD 100-per-barrel mark this year. The international benchmark settled just a touch under the USD 90 mark on Tuesday.


Key news triggers to keep your eye on in the first days of this new month:

  • Interest rates: The Central Bank of Egypt will hold its first policy meeting of 2022 on Thursday. All analysts surveyed in our regular interest rate poll expect the CBE to keep rates on hold, as they anticipate our rates continuing to attract portfolio inflows even amid Fed tightening and global inflationary pressures.
  • PMI: January PMI figures for Egypt, Saudi Arabia, and the UAE are also due out on Thursday.
  • Foreign reserves figures for January should be out from the Central Bank of Egypt before the week is out.
  • Inflation: Inflation figures for January will be released next Thursday, 10 February.

A call to logistics and cargo transport firms for rail freight privatization: Egyptian National Railways (ENR) is inviting private sector players to a forum at its headquarters on Tuesday, 22 February, to gauge interest in its plans to delegate the management and operations of freight transport to the private sector, Al Mal reports. You can register for the forum by sending the organizers an email.

From our friends at the US embassy: Women can now apply to join Fortune Global Women's Mentoring Program which will take place from 8-28 May 2022. The program aims to bring emerging women leaders from around the world to the US to meet and learn from the Fortune Most Powerful Women community, which includes executive women mentors from companies such as Accenture, Johnson & Johnson, and Aetna. The deadline to apply for the program is 8 February. You can begin your application by signing up here.

ALSO- The embassy is now accepting applications for Cultural Property Agreement Implementation projects that would help Egypt protect cultural property from looting, theft, and illicit trafficking. The guidelines state that concept notes should be sent in by this Thursday, 3 February, while shortlisted applicants will need to submit full applications by 4 May. Each project will receive USD 50-100k, with around USD 500k earmarked for the entire program.

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


*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: A long neglected component of Cairo’s urban and historical core, Old Cairo is finally on the cusp of revitalization. With restoration work already underway in the former capital of the Islamic world and at least EGP 4 bn designated for the first of the three-stage government project, we take a look at what has been accomplished so far and what might be in store for residents and tourists in the very near future.



FinMin’s Ahmed Kouchouk mitigating the Fed, our first sovereign sukuk and how we got back onto the JPMorgan bond index

EXCLUSIVE– How our inclusion in the JPMorgan indices will help with us manage our debt as countries around the world raise key interest rates: On the face of it, the timing of Egypt rejoining JPMorgan’s emerging-market bond index might not have been ideal, considering the US Federal Reserve’s push to raise interest rates this year — potentially driving inflows out of emerging markets. Vice Minister of Finance Ahmed Kouchouk would argue differently: Not only is joining the indices a milestone in our debt diversification and reduction strategy, our inclusion and the message this sends to investors would help cushion Egypt from the worst of any potential outflows.

We spoke with Kouchouk on how the inclusion is a crucial element of our debt strategy, what it took to get us back in the index, what the government plans to do to mitigate the impact of a high global interest rate environment, and the timing of some key debt issuances we have planned this year.

Below are edited excerpts of our conversation:

Joining JPMorgan’s emerging-market bond index at the weight at which we did was a crucial milestone in our debt management strategy — and one that has been in the works for three years now. When the Finance Ministry was drawing up its debt reduction plan, it knew that the plan would rest on three objectives: diversifying our borrowing, extending our debt profile away from short-term borrowing and into long-term borrowing, and bringing down our debt-to-GDP ratio.

Joining the index would directly help accomplish the first two goals and would help drive us into the third as it would give us access and raise our exposure to more sophisticated institutional investors who are looking for long-term fixed-income investments, Kouchouk told us. It would also allow us to generate more demand for longer tenor debt offerings, he added.

What kind of long-term investor are we looking at? “We are starting to see interest from big pension funds from Western Europe and the US,” some of whom want to buy into our debt for the first time, Kouchouk revealed. “We’re talking huge investors,” with asset managers that manage USD tns. “We’ve never seen fixed income investors of this size buy into our debt before,” he said.

Step #1 to getting back on the index — more liquidity in the market: Egypt’s debt sales needed to be bigger in terms of size, tenors and frequency, Kouchouk said. When the ministry first entered talks with JP Morgan, our local currency sales of T-bonds were on average in the neighborhood of EGP 500 mn per offering. JP Morgan inclusion requirements meant that number needed to be raised to around the EGP 5-7 bn mark. They also wanted to see additional trading on the bonds to ensure adequate trading liquidity, he noted.

Step #2 to getting back on the index — engaging with investors: Next up, the Finance Ministry had to set up dedicated teams that liaise with investors in Egypt’s debt to help troubleshoot on issues such as dual taxation and tax clearance, as well as setting up an investor relations unit that would help communicate any shifts in the market and to reassure them about their investments, Kouchouk noted.

Good implementation on those fonts got Egypt onto the index watch list in April, which is effectively a monitor tool to gauge the consistency of our bond sales, the performance of our bonds, and meeting our other requirements for inclusion. In the end: 90% of investors surveyed independently by JP Morgan voted to include Egypt’s bonds.

Would a series of Fed rate hikes offset any potential gains from joining the index? The Fed raising interest rates will undoubtedly have an impact on all emerging markets and has the potential to drive outflows to more developed markets, Kouchouk warned. He points out that the USD 26 bn in EGP bonds in the indices have an average yield of around 14.9% (with an average net yield of around 13%). This is among the highest of any emerging markets and so the impact would not be as pronounced as on other EMs. “It is still too early to measure what impact such a decision would have on our yields, but we hope that they will continue to remain at manageable levels in light of positive macro fiscal developments delivered by the Finance Ministry and the government,” he added. These should also improve risk premium by investors, he notes.

The Finance Ministry can only react to market-changing global conditions by sticking to the strategy at hand, says Kouchouk. This includes delivering solid macro indicators and meeting our targets for the primary balance (a surplus of 1.5% of GDP in FY2021-22), the overall budget deficit (6.7% of GDP) and lowering the debt-to-GDP ratio to below 90% by the end of the current fiscal year. “The Finance Ministry has been and would remain committed to meet its annual targets despite external headwinds,” he added.

Almost as crucially, we must continue to be proactive with investors to manage the risk perception, Kouchouk tells us. We must constantly engage with them to remind them that Egypt is an outlier among emerging markets.

As far as global foreign currency denominated debt is concerned, the Finance Ministry’s baseline scenario sees us issuing at a similar pace as in previous years (an average of USD 5 bn), Kouchouk said. He notes, however, that it is still too early to announce a target for issuances as the FY2022-23 budget is still being worked on, and that would of course also be dependent on market conditions. Last year, the Finance Ministry sold USD 6.75 bn in USD-denominated eurobonds across the two issuances it took to market in February and September, both of which saw strong demand from foreign investors.

Having said that, Kouchouk still expects our maiden sovereign sukuk issuance to take place by June 2022. The Finance Ministry also recently announced it is looking to issue EGP 500 mn worth of JPY-denominated Samurai bonds by the end of June.

FinMin is also looking to diversify our bond offerings with development and ESG bonds, and is working on preparing for a likely sale some time in the next fiscal year, he says.

Why is our debt still not Euroclearable? It is simply a matter of procedure, he tells us. Representatives of the Belgian clearinghouse must arrive here and inspect our readiness to become Euroclearable and address any outstanding issues before we look to sign on. Last we heard, the government expects to finalize an agreement with the Belgian clearinghouse to clear local debt in Europe during the second half of 2022.


Local pharma player Nerhadou attracts private equity interest

Nerhadou may have new minority shareholders: Emerging-market private equity firms Affirma Capital and StonePine have agreed to invest USD 20 mn to purchase a “significant minority stake” in local pharma and nutraceutical player Nerhadou International, according to a press release (pdf), which didn’t disclose the size of the stake or the value of the transaction.

Why Nerhadou? The two PE firms “identified Nerhadou as a unique player due to its sizeable presence and dominant market share,” the statement reads, describing it as “one of the largest and fastest-growing nutraceutical and pharma players” in the country. They also noted that the pharma firm is the first to manufacture oral dispersible film — tabs that dissolve on the tongue to deliver meds, as an alternative to pills — in Egypt, giving it a first-mover advantage.

IPO dreams: Nerhadou plans to use the investment to expand operations and launch new products in Egypt and regional markets, as well as to “bring the company to IPO standards,” CEO Mohamed Shalaby said.

This isn’t StonePine’s first gig in Egypt: StonePine ACE Fund — a joint venture between StonePine Capital Partners and ACE & Company, a Geneva-based global PE fund — was among the consortium of companies that acquired a 60% stake in Taaleem Management Services in 2019. It has also made an undisclosed investment in funeral services startup Sokna.

Affirma has been eying the Egyptian market for a while now: Affirma does not list any Egyptian investments on its website, though last year it was reportedly planning to invest USD 20-100 mn in at least one Egyptian business.

More on the way? The investment “will support the broader Egypt-focused investment strategy for both firms which are in the process of evaluating and jointly-executing further investment opportunities in Egypt,” the statement said.

When will the transaction close? Execution is subject to satisfaction of conditions precedent and requires regulatory approvals, including from the Egyptian Drug Authority.

Advisors: Renaissance Capital was the exclusive financial advisor to Affirma Capital and StonePine, while ADIB Capital acted as the lead sell side advisor. Al Tamimi & Co was Nerhadou’s legal advisor and White & Case advised Affirma Capital and StonePine.


Solar plants face new grid integration fees

Solar plants are facing more new charges: Solar plants producing more than 500 KW of power will be required to pay fees to the Electricity Ministry to help defray the costs of connecting to the national grid — a move that industry players say represents a threat to Egypt’s nascent solar sector.

The fees: Solar plant operators will pay EGP 0.257- 0.329 per KWh in “integration fees,” according to a decision (pdf) this week by the Egyptian Electric Utility & Consumer Protection Regulatory Agency (Egyptera). All solar plants over 500 KW — whether the energy is only being used for self-consumption or whether the excess is being fed into the grid under a net metering system — will face the charges. The new taxes come at a time when margins in the sector are facing sharp pressure amid rising commodity prices and shipping costs.

Solar players are concerned: The decision is causing “anxiety and concern” among companies in the sector, said Ayman Abdel Halim, the executive director of industry body the Solar Energy Development Association (SEDA), who called it a “dangerous move that contradicts the state’s aim to expand the production of renewable energy.”

They knew the fees were coming — just not how much they would be: The integration fees were first announced in an April 2020 decision, but had not been defined until now, former head of the New and Renewable Energy Authority Mohamed Al Sobki told us. He said that the set fees could impact future projects, but that projects that were implemented after the April date had already agreed to pay integration fees.

And not everyone shares the concern: The solar industry remains attractive to investors despite the new fees, Ehab Ismail, deputy head of the New and Renewable Energy Authority (NREA), told us, adding that it was up to solar developers to make investment decisions on a project-by-project basis.

Egypt has ambitious renewables targets: Ahead of this year’s COP27 climate summit in Sharm El Sheikh, Egypt has pledged to expand renewable capacity to cover 42% of the country’s energy needs by 2030, up from 10% currently. That target could be made harder to achieve by the new integration fees, as well as the incoming 5% import tariff on PV cells.

Could this make renewables less interesting to investors and operators? The fees are only being applied to renewable energy sources, with conventional energy getting an exemption from the charges, which could result in renewables losing their competitive advantage.

FDI could be on the line: In a statement to Enterprise, a source from a private sector solar company called the decision “extremely prohibitive for the feasibility of solar projects” and said it would hurt investment into the sector. “We urge the authorities to prevent solar companies from defaulting … and avoid a situation where FDI stops flowing into a very promising sector that could have a significant role in Egypt’s economy,” they said.


Egypt moves closer to getting its first waste-to-hydrogen plant

H2 Industries says it on the way to establishing Egypt’s first waste-to-hydrogen plant in East Port Said after it recently received preliminary approval from the Suez Canal Economic Zone (SCZone) for the project, it said in a statement yesterday. The plant will cost around USD 3 bn to establish, executive chairman Michael Stusch told The National.

H2 Industries says the 1 GW facility will produce 300k tonnes of hydrogen each year at half the cost of current production technologies, consuming 4 mn tonnes of organic waste and non-recyclable plastics in the process.

The company has not made clear how it plans to finance the USD 3 bn facility, nor has it made clear other significant project details. The SCZone does not appear to have issued any statement about the H2 Industries project, although it did release a statement a week ago touting its attractiveness as a destination of investment in “green hydrogen industries” following a visit by UK Ambassador Gareth Bailey and UN climate official Nigel Topping.

The first waste-to-hydrogen plant on this scale: “The exciting part of the project is that it is the first big-scale, waste-to-hydrogen plant for a huge amount of hydrogen,” Stusch said in the statement. Waste-to-hydrogen technology is still in its infancy — we know of no operational large-scale W2H plant in operation, though some are set to come online this year. Get in touch if you know otherwise.

Whose waste? The “tons of waste that collects in Egypt” will be “secured at the Mediterranean entrance to the [Suez] canal,” the statement reads, without further clarification.

About the company: Headquartered in New York, H2 Industries is a global hydrogen generation and energy storage solutions company, with a focus on developing technologies that generate, store, transport and release green hydrogen.

Egypt is looking to burnish its green hydrogen credentials ahead of this year’s COP27 climate summit in Sharm El Sheikh with projects that could be worth USD 3-4 bn. The country’s first plant — a 100 MW facility being constructed in Ain Sokhna by a developer consortium of Orascom Construction, Norway’s Scatec, Nassif Sawiris-backed Fertiglobe, and the Sovereign Fund of Egypt— will be showcased at the global gathering and is expected to come online in 2024. The Electricity Ministry is also looking to work with international consultants to help it put together a 12-month development strategy for the local industry, which is also attracting names such as Siemens, Eni, General Electric and ThyssenKrupp.


Car sales up 26% in 2021

Egypt’s auto sector deftly managed the global chip shortage in 2021 as strong demand pushed sales to their highest levels since the EGP float in 2016. Industry figures out yesterday showed that almost 291k new vehicles were sold last year, up 26% from 2020, despite rising prices caused by shortage of many models (thank you, chip shortage) and higher shipping costs. Sales of new passenger cars rose 28% to 215k, while truck sales were up 35% to 50k, according to data released by the Automobile Market Information Council (AMIC).

Sales were up in December: AMIC reported 22.2k cars sold in December, up 12% from November's sales and up 9.7% from December 2020. Bus sales rose 8.7% from the same month last year, while truck sales saw a slight dip of 2.6% in comparison to December 2020.

The figures don’t tell the whole story: A top exec at one of the country’s largest distributors has previously told us it is “day to day” when it comes to availability of many models — explaining that it is unlikely that supply of most brands will improve significantly before mid-2022 or later. The culprit remains shortages of the chips used in modern vehicles. Distributors are also facing pressure on pricing from rising freight costs as part of the Great Global Supply Chain Snarl — and will need to pass those on to consumers.


Delivery startup Yalla Fel Sekka plans MENA expansion after closing USD 7 mn series A round

Delivery startup Yalla Fel Sekka (YFS) has closed a USD 7 mn series A funding round, the company announced in an emailed statement. The round was led by DisruptAD, an Abu Dhabi-based VC set up by the emirate’s sovereign wealth fund ADQ in 2021. Kharafi Group also participated in the round, as well as existing investors Flybridge Ventures and I Squared Capital, which took part in the company’s previous USD 2.5 mn seed round, according to TechCrunch.

What does the company do, exactly? YFS is a B2B2C delivery and logistics company that allows businesses such as supermarkets, pharmacies and ecommerce outfits to sell to their customers via its network of dark stores, warehouses and delivery drivers. Since launching in early 2020, the company has increased its order rate to more than 10k per day and its gross merchandise volume is expanding 20% each month, said Yasmine Abdel Karim, YFS’ CEO and co-founder. It has completed 2 mn deliveries and is now operating in five cities in Egypt — Cairo, Giza, Alexandria, Mansoura and Tanta — with a network of 1k drivers.

Expansion plans: YFS will use the funds to continue expanding in Egypt and enter new markets in the MENA region, it said in the statement. This includes building up its network of dark stores, of which the company wants to build another 20-40 this year, Abdel Karim told TechCrunch.


EFG Hermes tops EGX brokerage league table in January — yet again

EFG Hermes topped the EGX’s brokerage league table once again in January, with a market share of 46%, according to figures from the EGX (pdf). Rounding out the top five were CI Capital (5.1%), Arqaam (4%), Beltone (3.4%) and Mubasher (2.9%).



Featuring on the airwaves last night: Egypt’s USD 1.65 bn purchase of an unspecified number of K9 howitzers from South Korea captured the attention of Masaa DMC’s Ramy Radwan (watch, runtime: 1:49). The agreement includes tech transfer, allowing Egypt to manufacture the weapon system locally, a military spokesperson said in a statement. The news comes less than a week after the US approved a USD 2.5 bn arms purchase by the Egyptian government.

SMART POLICY- Entire sectors can’t be exempt from the new private sector minimum wage: The National Council for Wages (NCW) is rejecting all requests for exemption from the new private sector minimum wage that were filed by sectors as a whole, NCW board member Magdy Al Badawy told Masaa DMC’s Radwan in a phone-in last night (watch, runtime: 7:03). Al Badawy noted that some 22 sectors had been vying for an exemption for businesses before the council directed companies to file requests on an individual basis for case-by-case review. The new minimum wage of EGP 2.4k per month came into effect at the start of the year, but thousands of companies were handed six-week grace periods until mid-February, when the government will decide on whether to exempt them.

Also getting attention: A gas leak that killed a family of seven in their home in Cairo’s Sharabia neighborhood also got some airtime from Radwan (watch, runtime: 5:05).


Another record daily tally

You guessed it: We’ve hit another record daily tally: The Health Ministry reported 2,291 new covid-19 infections yesterday, up from 2,223 the day before — an eighth consecutive record high. Egypt has now disclosed a total of 428,202 confirmed cases of covid-19. The ministry also reported 48 new deaths, bringing the country’s total death toll to 22,683.

Cases likely won’t cool off until the middle of the month, according to the head of Vacsera’s allergy center.

The vaccine tally: 26,360,054 people are now fully vaccinated against the virus, while some 11.1 mn people have received only their first shots and 622,204 people have received booster shots.


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Another blockbuster Saudi IPO? The kingdom’s largest retail pharmacy chain, Al Nahdi Medical, hopes to raise USD 1.3 bn in its Tadawul debut — which would make it the KSA’s largest listing since Aramco’s bumper USD 30 bn IPO in 2019, Bloomberg reports, citing unnamed sources. The 30% stake sale, which could see the company valued at USD 4.3 bn, is planned to go ahead within months. Al Nahdi has appointed HSBC Holdings and Saudi National Bank’s investing arm to manage the sale.

Dubai looks to soften the blow of the UAE’s new corporate tax: The emirate is considering cutting fees for businesses in a bid to balance out the costs of the newly introduced corporate tax, Bloomberg reports. The Dubai bourse fell the most in the region yesterday, after the UAE on Monday announced that businesses would start paying tax for the first time ever starting next year. The Abu Dhabi exchange saw intraday losses but went into the green by close, Bloomberg notes.

EARNINGS WATCH- Google parent company Alphabet smashed another quarterly sales record in the fourth quarter as sales jumped 32% to hit USD 75.3 bn, Reuters reports. The results lend weight to some analysts’ assertion that Big Tech will prove immune to the current jolts in the market. Meta is next to announce its Q4 financials later today, while Amazon is up on Thursday.




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The EGX30 rose 1.0% yesterday on turnover of EGP 782 mn (28.4% below the 90-day average). Local investors were net buyers. The index is down 2.9% YTD.

In the green: Orascom Development Egypt (+5.8%), Qalaa Holdings (+5.2%) and Palm Hills Development (+3.6%).

In the red: CIRA (-2.9%), TMG Holding (-2.0%) and Egypt Kuwait Holding-EGP (-1.2%).


PROJECT PROFILE- Old Cairo Redevelopment: Once considered the capital of the Islamic world, Old Cairo — also known as Fatimid, Islamic, or Historic Cairo — is home to scores of monuments, mosques and palaces dating back to its 10th century founding, and has since 1979 been designated a World Heritage Site by the United Nations Educational, Scientific and Cultural Organization (UNESCO). But years of mismanagement and neglect has left large swaths of historic buildings in the area dilapidated and underutilized from a tourism standpoint. This could be set to change after the government last year announced a three-stage restoration project that aims to revitalize Old Cairo into a year-round tourist attraction and preserve the area’s heritage (watch, runtime: 25:42).

So what exactly is in store for Old Cairo? Proposals submitted by archeologists and heritage experts to the government last year focus on restoring facades and registering previously unregistered historic buildings, according to a cabinet statement. They also include a plan to establish new hotels in the area, a bazaar and restaurant space, a handicraft school, a documentary film center, retail spaces, public parks, tourist walkways, and parking. The aim is to create a self-contained, walkable area that has been entirely redeveloped and will be independently managed with UNESCO supervision, lead consultant on the project Mohamed El Khattib told Masaa DMC in December (watch, runtime 11:45).

The Citadel alone is set to see a new recreational park with a handicrafts complex, restaurants, entertainment, and a cultural education center, Ihab El Far, head of the Armed Forces Engineering Authority, said in a cabinet statement. Caravanserai or wikalat (inns or guest houses) in the area are also set to be restored, he added.

The project’s first phase focuses on restoration in five priority locations: The area surrounding Al Hakim Mosque and the Northern gates of Old Cairo (Bab Al Futuh and Bab Al Nasr); the area surrounding Al Hussein Mosque; Bab Zuwayla and El Khayameya; and the Citadel and Darb El Labana. Development will also take place on Al-Mu'izz Street and Darb El Ahmar Street, according to El Khattib. Plans for the following two stages of the project have not yet been disclosed.

By the numbers: Building restorations in the first phase will cover approximately 0.42 sqkm — some 5.25% of the total 8 sqkm area — and are expected to be completed in three years’ time at a cost of some EGP 4 bn, Khaled Siddiq, Director of the Urban Development Fund, tells us.

The bill to see the entire project through could run up to some EGP 60-70 bn, Siddiq estimates, though the final cost is dependent on further studies. The project is being implemented by the Armed Forces Engineering Authority with oversight from the Urban Development Fund, and funded by state budget allocations to the Housing Ministry.

That’s a huge sum, especially when compared to other major tourism site projects: By comparison, the restoration of the Giza Plateau, including establishing the new Grand Egyptian Museum, is estimated to have cost around EGP 30 bn. But the government is ready to foot the bill: “For the first time the budget is not a problem,” El Khattib told Reuters last September, adding that “any budget for Historic Cairo will be approved."

Where things stand: Work has already begun on restoring the facades of historic buildings and refacing newer buildings — as well as relocating some residents and businesses away from the area to make room for recreational and commercial activity. Prime Minister Moustafa Madbouly last year announced a freeze on construction and demolition in the area, including for those with current permits. By November, restoration had commenced on the facades of 18 historic buildings, General El Far told the Cabinet. Some 190 dilapidated buildings in the phase-one area were in the process of being vacated, while work had begun on six empty plots that were handed over to the authorities. Some 22 workshops were also vacated, 16 of which had been cleared of debris by late last year, while debris was also cleared from the area surrounding the Al Hakim Mosque.

What about Old Cairo residents? Some residential properties will be redeveloped for commercial and tourist purposes, while others will be restored and maintained as homes. Buildings at risk of collapse are set to be demolished and the land repurposed, while hazardous and polluting industrial factories, warehouses and storage facilities — some of which have in the past seen fires break out that threatened historic buildings — are being relocated, according to El Khattib. The owners of homes and businesses deemed unsafe or “inappropriate” by the council are being moved to the Gehan El Sadat axis in Nasr City or offered equivalent compensation, officials have said.

Management is being streamlined: The involvement of many different organizations and ministries — from Cairo governorate to the Tourism and Antiquities Ministry, the Ministry of Religious Endowments, and the Housing Ministry — has led to “inappropriate and conflicting management,” of the area, Khattib has said. The project aims to overcome this by creating one centralized authority for the redevelopment of Old Cairo, run by a council of heritage experts that coordinates between ministries and reports directly to the Cabinet, with oversight from UNESCO.

And the private sector could be brought in: Although financing for restoration work is set to come entirely from state coffers, according to Siddiq, there will be opportunities for private sector involvement. The Sovereign Fund of Egypt (SFE) in 2020 signed an agreement with the Supreme Council of Antiquities (SCA) to kick off plans to develop the Bab El Azab landmark nearby the Citadel into a tourist area in partnership with private investors. The agreement gave the SFE the greenlight to shop for private partners to participate in the project as investors or service providers, with the SCA retaining managerial control over the site. Management, maintenance and marketing initiatives across Old Cairo could be opened up to private sector players once restoration work is complete, Siddiq told us.

The Old Cairo restoration initiative is part of a citywide heritage push: As the government heads to the new administrative capital, many parts of Cairo’s innermost districts are set to see redevelopment — with a focus on preserving and repurposing historic buildings. The Fustat Garden development project announced last year, which could soon be home to a new 500 acre public park nearby the National Museum of Egyptian Civilization and the Ain El Sira lake, is a crucial component of the government’s ambitions. The Magra El Oyoun development project — which was earlier this month estimated to be 65% complete — is also part of the grander ambition of reshaping what Old Cairo has to offer.

Your top infrastructure stories for the week:

  • Natural gas exports to Lebanon to begin by March: The Arab Gas pipeline running through Jordan and Syria through which Egypt is expecting to export natural gas to Lebanon will be up and running by the end of February or the beginning of March, Oil Minister Tarek El Molla said.
  • El Sewedy Electric for Trading and Distribution has signed an EGP 615 mn contract with construction firm EDECS to complete network and infrastructure work at Alexandria Port.
  • The Suez Canal Economic Zone is looking for ways to increase business ties with Greece’s second-largest port after it signed an agreement with the Thessaloniki Port Authority last week.
  • The European Bank for Reconstruction and Development is working with QNB AlAhli and blockchain platform CargoX — of Nafeza fame — to test out digital trade finance network Contour in Egypt.


1Q2022: Launch of the Egyptian Commodities Exchange.

1Q2022: Swvl acquisition of Viapool expected to close.

1Q2022: Waste collection startup Bekia plans to expand to the UAE and Saudi Arabia.

1Q2022: Rameda Pharma will begin selling its generic version of Merck’s oral antiviral covid-19 med.

1Q2022: Pharos Energy’s sale of 55% stake in El Fayum, Beni Suef concessions to IPR Energy Group subsidiary IPR Lake Qarun expected to close.

Early 2022: Results to be announced for the second round of the state’s gold and precious metals auction.

1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

9 January – 6 February (Sunday-Sunday): 2021 Africa Cup of Nations, Cameroon.

Second half of January: Egypt will host the Egyptian-Bahraini Joint Committee.

Second half of January: Regulations for installing EV charging stations will be published.

25 January – 1 February (Tuesday-Tuesday): EGX will open over the counter transactions for the National Bank of Kuwait.

27 January-7 February (Thursday-Monday): Cairo International Book Fair, Egypt International Exhibition Center.

January-February 2022: Construction work on the Abu Qir metro upgrade will begin.

February: Hassan Allam Construction’s new construction firm established with Russia’s Titan-2 to handle construction work on the Dabaa nuclear power plant begins its operations.

February: Ghazl El Mahalla shares will begin trading on the EGX this month.

February: Suez canal transit fees set to increase 6%, exempting cruise ships and LNG carriers.

Mid-February: End of grace period to comply with new minimum wage for firms who sent in exemption requests.

Mid-February: A Hungarian delegation will arrive in Egypt for talks over a potential investment in an industrial area in the SCZone.

2 February (Wednesday): OPEC+ will meet to decide on another 400k oil production increase a day for March.

3 February (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

3 February (Thursday): January PMI figures for Egypt, Saudi Arabia, and the UAE will be released.

3 February (Thursday): Deadline to send in concept notes for Cultural Property Agreement Implementation projects to the US Embassy in Cairo.

4-20 February (Friday-Sunday): 2022 Winter Olympics, Beijing.

11 February (Friday): Deadline for Anghami SPAC merger.

11-13 February (Friday-Sunday) FIBA Intercontinental Cup, Cairo.

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

14-19 February (Monday- Saturday): An art exhibition created by marginalized children will be held at Townhouse Gallery. The event is organized by the Sawiris Foundation for Social Development, AlexBank, Townhouse Gallery, Al Ismaelia for Real Estate Investment, and Ubuntu Art Gallery.

15 February (Tuesday): The Industrial Development Authority’s deadline for receiving offers from companies for licenses to manufacture steel products.

15 February (Tuesday): Orange Ventures’ deadline to receive applications from seed-stage fintech startups.

19 February (Saturday): Public universities begin the second term of the 2021-2022 academic year.

19-21 February (Saturday-Monday): Nebu Expo for Gold and Jewelry 2022.

21 February (Monday): Hearing at Cairo Economic Court (pdf) on FRA lawsuits filed against Speed Medical.

22 February (Tuesday): The Egyptian National Railway is holding a forum to gauge public interest in its plans to delegate the management and operations of freight transport to the private sector.

26 February (Saturday): Speed Medical will elect a new board during ordinary general assembly (pdf).

27 February (Sunday): British-Egyptian Business Association (BEBA) green finance event with Finance Minister Mohamed Maait, Semiramis Intercontinental, Cairo

28 February- 1 March (Monday-Tuesday): The Future of Data Centers Summit.

End of February: Lebanon to receive gas from Egypt via a pipeline crossing Jordan and Syria.

March: Rollout of the government financial management information system (GFMIS), a suite of electronic tools to automate the government’s financial management processes (pdf) that will replace the existing “closed” financial management system.

March: 4Q2021 earnings season.

March: Deadline for the World Health Organization’s intergovernmental negotiating body to meet to discuss binding treaty on future pandemic cooperation.

March: World Cup playoffs.

March: The government hopes to sign a final contract between El Nasr Automotive and a new partner for the local production of electric cars.

March: Target date for Saudi tech firm Brmaja to IPO on the EGX.

March: Egypt to host World Tourism Organization Middle East committee meeting.

9-18 March (Wednesday-Friday): The 55th edition of the Cairo International Fair.

15-16 March (Tuesday-Wednesday): Federal Reserve interest rate meeting.

24 March (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

24 March (Thursday): Egypt will host Senegal in the first leg of their 2022 FIFA World Cup qualifiers' playoff.

26 March (Saturday): Egypt-EU World Trade Organization dispute settlement consultations end.

28-29 March (Monday-Tuesday): The Egypt International Mining Show (EIMS 2022) will take place virtually.

29 March (Tuesday): The second leg of the 2022 FIFA World Cup qualifiers' playoff between Egypt and Senegal.

31 March (Thursday): Deadline for submitting tax returns for individual taxpayers.

31 March (Thursday): Vodacom purchase of Vodafone Group’s stake in Vodafone Egypt expected to be completed by this date.

31 March (Thursday): Supply Ministry expected to take final decision on bread subsidies by this date.

2 April (Saturday): First day of Ramadan (TBC).

3 April (Sunday): Bidding begins on the Industrial Development Authority’s license to manufacture tobacco products.

4 April (Monday): CDC Group will formally change its name to British International Investment.

22-24 April (Friday-Sunday): World Bank-IMF spring meeting, Washington D.C.

24 April (Sunday): Coptic Easter Sunday (holiday for Coptic Christians).

25 April (Monday): Sham El Nessim.

25 April (Monday): Sinai Liberation Day.

28 April (Thursday): National Holiday in observance of Sham El Nessim.

30 April (Saturday): Deadline for submitting corporate tax returns for companies whose financial year ends 31 December.

Late April – 15 May: 1Q2022 earnings season

May: Investment in Logistics Conference, Cairo, Egypt.

1 May (Sunday): Labor Day.

3-4 May (Tuesday-Wednesday): Federal Reserve interest rate meeting.

4 May (Wednesday): 3 February (Thursday): Deadline to send in applications for Cultural Property Agreement Implementation projects to the US Embassy in Cairo.

5 May (Thursday): National Holiday in observance of Labor Day.

2 May (Monday): Eid El Fitr (TBC).

19 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

16 June (Thursday): End of 2021-2022 academic year for public schools.

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

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

30 June (Thursday): June 30 Revolution Day, national holiday.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

2H2022: The inauguration of the Grand Egyptian Museum.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H2022: The government will have vaccinated 70% of the population.

July: A law governing ins. for seasonal contractors will come into effect.

1 July (Friday): FY 2022-2023 begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July – 14 August: 2Q2022 earnings season.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

September: Egypt will display its first naval exhibition with the title Naval Power.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

October: World Bank and IMF annual meetings in Washington, DC

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

18-20 October(Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

Late October – 14 November: 3Q2022 earnings season.

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

7-18 November (Monday-Friday): Egypt will host COP27 in Sharm El Sheikh.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

January 2023: EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

**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 above between the actual holiday and its observance.

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