Wednesday, 15 June 2022

AM — Egypt to sign gas agreement with the EU + Israel today.
Plus: It’s the biggest Fed day since March ’20

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, ladies and gentlemen, to another commodities-heavy issue. Energy and wheat continue to drive the conversation at home and abroad. And with inflation being where it is, the all too critical Fed meeting today is continuing to weigh on markets, so strap in.

THE BIG STORY AT HOME- Is a potential gas export agreement with us, Israel and the EU coming today? EU Commission President Ursula von der Leyen and Israeli energy minister Karine Elharrar will be in Cairo today to potentially seal an agreement that would see an increase in the export of Israeli gas to Europe through our LNG facilities. We break down the details in the news well below.

WATCH THIS SPACE- US, EU energy diplomacy will feature heavily this summer as US President Joe Biden Joe is reportedly landing in KSA in mid-July for two days of meetings with Saudi officials, including with Crown Prince Mohammed Bin Salman, NBC reported, citing three sources with knowledge of the matter. Uncle Joe’s plans to visit Riyadh come as his administration fights to get domestic fuel prices under control, which have soared on the back of the war in Ukraine. Relations between the two countries have been strained since the beginning of Biden’s presidency when he labelled the country a “pariah” due to the 2018 murder of Saudi journalist Jamal Khashoggi.

Also on the agenda: Saudi-Israeli rapprochement. Axios reported last month that Biden could use the trip to push forward his administration’s efforts to get Saudi Arabia and Israel to normalize ties. The plan — which reportedly involves finalizing the transfer of Tiran and Sanafir to Saudi — has reportedly received the green light in Israel, potentially putting Biden in reach of his first major foreign policy breakthrough.

It’s a mini regional gathering in Jeddah: Biden will also meet with President Abdel Fattah El Sisi during his stay in Jeddah, as well as leaders of the other GCC nations, Iraq and Jordan, the president’s aides told the New York Times.


All eyes will be on the Fed this afternoon as the central bank makes perhaps its biggest policy decision since it intervened to stop the covid-induced market meltdown in March 2020. Following last week’s horrible inflation data, the market’s base case is now for policymakers to agree to a huge 75-bps rate hike — a step that was almost unthinkable just a few days ago, and if it comes to pass would be the biggest increase since 1994.

Market volatility continued yesterday: US stocks fell further into a bear market yesterday and the bond sell-off continued as traders awaited the Fed’s decision. The S&P 500 saw its fifth-straight day of losses, ending the day 0.4% in the red and extending its descent further into bear territory. In the bond market, yields on US two-years hitting their highest level since 2007 while 10-years rose towards 3.5%, a level not seen since 2011.

If history is anything to go by, the bears are here to stay: The current S&P 500 selloff — which has left the index 22% beneath its January peak — could take a lot longer to bottom out before recovering, analysts say, according to Bloomberg. “This drawdown could extend to 35% and last over a year before the trough is reached,” an analyst at Saxo Bank wrote in a note, comparing the current downturn to the dotcom bust and the bear market triggered by the oil crisis in 1973.

Chinese shares are alone in seeing gains this morning, with most other Asian indexes in the red ahead of the Fed meeting. Stock futures have US benchmarks rising at the opening bell, while over in Europe only the FTSE 100, the Euro Stoxx and the Dax will open higher.

Everyone in the global business press is Fed-watching this morning: Bloomberg | FT | WSJ | CNBC | Reuters | Associated Press.

WHAT’S HAPPENING TODAY-

The African Export-Import Bank’s (Afreximbank) annual meetings will take place today at the new capital’s St. Regis Almasa Hotel. President Abdel Fattah El Sisi, Central Bank of Egypt Governor Tarek Amer, and Afreximbank President Benedict Oramah will give keynote speeches at the event, which will focus primarily on implementing the Africa freetrade agreement that came into force in 2021.

FOR TOMORROW- The EU-Egypt Sustainable Food Value Chain conference takes place at Grand Nile Tower Hotel tomorrow.

CIRCLE YOUR CALENDAR-

The first workshop in the government’s public consultations on its ambitious state ownership policy document begins next Sunday, according to the online platform for the consultations. Every Sunday and Tuesday will see workshops on specific industries, starting with an agriculture-focused workshop next Sunday and a food industries-focused workshop on Tuesday. Each Thursday is reserved for workshops with the House of Representatives or the Senate, along with think tanks.

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

enterprise

*** 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: We sit down with Ahmed Ashour, co-founder and CEO of infrastructure management platform Pylon, to discuss the ins and outs of how the company’s data-driven software is bringing more efficiency to our traditional infrastructure — electricity and water distribution — and helping reduce substantial revenue losses.

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ENERGY

Europe knocked. We answered.

Egypt, Israel and the EU could sign an agreement to increase gas export across the Mediterranean in Cairo today. EU Commission President Ursula von der Leyen and Israeli energy minister Karine Elharrar will be in the capital today to seal the agreement, which is expected to pave the way for more Israeli gas to be exported to Europe via Egypt’s LNG facilities. “Tomorrow we’ll take an important step, with the signing of a trilateral agreement on gas between Israel, the EU and Egypt,” von der Leyen wrote on Twitter yesterday following a meeting with Israeli PM Naftali Bennett.

Expect to hear more details later today: Draft documents picked up by the press have suggested that the EU could help finance new energy infrastructure ⁠— which would come in handy as the government solicits funds for new LNG terminals ⁠— and work with Egypt and Israel to curb methane gas emissions.

The signing will coincide with a meeting of the East Mediterranean Gas Forum (EMGF), which will bring together officials from the eight founding countries, as well as observers the EU, the US and the World Bank.

This is precisely what we had been banking on as far as our regional gas hub ambitions go: Since its inception, the EMGF has been a key foreign policy initiative of Cairo — where the forum is headquartered — that would see us be the LNG export hub for the region’s gas reserves. Apart from Israel, Egypt has agreements with Cyprus and Greece on pipelines that would see their gas sent to our facilities for re-export.

Israel has ambitions to become a regional gas hub of its own: The EU is continuing to study the planned EastMed pipeline, which would ship 10 bn cubic meters of Israeli gas a year from the Mediterranean straight to Greece, von der Leyen said yesterday.

Gazprom reminded us yesterday of why the EU is so keen for EastMed gas: The Russian gas giant — which provides around 40% of Europe’s consumption — curbed supplies through the major Nord Stream 1 pipeline by 40% yesterday, blaming Siemens for malfunctions at its Baltic station. Russia has already cut off gas supplies to the Netherlands, Denmark, Poland and Bulgaria for failing to pay in RUB, threatening to intensify Europe’s energy crisis at a time when it is trying to reduce its reliance on Russian hydrocarbons.

ECONOMY

Egypt’s FDI might outdo much of the world in 2022

Egypt saw foreign direct investment inflows fall 12% in 2021 but remained the second-largest recipient of FDI in Africa after South Africa, according to the UN. Figures in the 2022 World Investment Report (pdf) show that the country received USD 5.12 bn of FDI last year, down from USD 5.9 bn in 2020. Accounting for the USD 367 mn in outflows, Egypt received net FDI of USD 4.8 bn during the year, down from USD 5.5 bn in 2021.

FDI had been on an upwards trend until the pandemic hit, rising from USD 4.3 bn in 2013 to USD 9 bn in 2019.

Signs are looking more promising this year, with USD 22 bn in Gulf money expected to enter the country in what the report says “may boost FDI going forward.” The UAE, Saudi Arabia and Qatar pledged to provide bns of USD in investments and central bank deposits earlier this year to provide emergency liquidity and economic support to mitigate the fallout from Russia’s war in Ukraine.

Greenfield projects have begun to recover: The value of greenfield projects more than tripled to USD 5.6 bn last year, but remained far below the USD 13.7 bn pre-pandemic in 2019. Sixty-five new greenfield projects were announced during the year, up from 52 the year before but below the 140 seen in 2019 before the pandemic. The report name-checks Abu Dhabi-based Reportage Properties’ USD 1.5 bn real estate project with Al Ahly Sabbour as one of the major greenfield investments announced last year.

The Madbouly government has also been on a drive for fresh FDI, with officials meeting with foreign and Arab investors in the past few weeks under efforts to promote the country as an investment-friendly destination as the state doubles down on its privatization push.

This could see us buck a global FDI decline in 2022: Global greenfield project numbers have already fallen 21% in 1Q and the trend looks set to continue as the war in Ukraine, rising interest rates, and increasing fears of recession in the US and Europe weigh on the global economy. “The fallout of the war in Ukraine with the triple food, fuel and finance crises, along with the ongoing covid-19 pandemic and climate disruption, are adding stresses, particularly in developing countries,” the report wrote. Investor uncertainty and risk aversion could also put “significant downward pressure” on global FDI this year, it adds.

But until then, flows into Africa more than doubled to USD 83 bn in 2021 though much of this was due to a single transaction, without which FDI growth would have been more moderate. European investors remain the largest holders of foreign assets in Africa, with the UK leading the pack with USD 65 bn in investments, and France coming in second with USD 60 bn.

Most areas of the world saw a recovery of FDI inflows in 2021 following exceptionally low levels the previous year. Global flows rose 64% to USD 1.58 tn on the back of booming M&A and international project finance thanks to loose financial conditions and huge infrastructure stimulus packages.

M&A WATCH

An all-Sawiris mining merger

Sawiris-backed Altus Strategies is merging with Toronto-listed gold royalty company Elemental Royalties in an all-stock transaction, the companies said in an LSE disclosure (pdf) yesterday. In what they’re dubbing a “merger of equals,” the transaction will see Elemental give Altus shareholders 0.594 shares in the new company for every Altus share they hold. This will give Elemental shareholders 52.9% of the firm and Altus shareholders the remaining 47.1%.

Bigger + more diverse: The merged entity will have a combined portfolio of 69, primarily gold assets across 13 top-tier jurisdictions, 11 of which are in production. The company will have an estimated combined revenue of USD 19.6 mn in 2022 and USD 24.6 mn next year.

Sawiris owns shares in both companies: Naguib Sawiris’ La Mancha fund holds significant stakes in Altus and Elemental. It acquired a 35% stake in Altus in 2020 and 9.3% of Elemental in April.

And backs the merger: La Mancha and other institutional investors from both sides are supporting the merger.

What they said: “Our enlarged scale and combined revenues will not only enhance our access to further high-quality royalties, but will also potentially reduce our cost of capital going forward,” Altus CEO Steven Poulton said. “As we succeed, we look forward to targeting medium-term capital distributions, as well as participating in further accretive consolidation opportunities in the royalty sector,” he added. Poulton will become the executive chair of the new company, while current Elemental chief executive Frederick Bell will be the CEO.

Altus has a footprint in Egypt: Altus subsidiary Akh Gold has four gold concessions across the Eastern Desert in Egypt, two of which were just awarded to the firm last month. The company said the two blocks cover 349 sq km, bringing the company’s total land holding to 1.9k sq km. The company said last month that it made multiple “high grade” gold discoveries of up to 100g of gold per ton.

The market reaction: Altus shares fell 5.4% in London yesterday while Elemental stock slipped 0.7% in Toronto.

DEBT WATCH

SODIC seals EGP 600 mn financing agreement with Ahli United Bank

SODIC subsidiary to borrow EGP 600 mn from Ahli United Bank: Ahli United Bank has agreed to provide SODIC subsidiary Six of October For Development & Real Estate Projects (SOREAL) with a EGP 600 mn discounting facility, enabling the real estate company to borrow against future repayments from its East Cairo project, Eastown Residences, according to a statement (pdf) yesterday.

Why go through with it: “This agreement comes in line with SODIC’s continuous efforts to diversify our funding sources to enable growth and support ongoing operations while maintaining the strength and liquidity of our balance sheet and financial position,” SODIC’s CFO Omar Elhamawy said.

Account receivables financing: A primer. Accounts receivable financing is a short-term funding method that allows companies to receive early payment of future income. It can come in handy when there’s a timing mismatch between the cash inflows and outflows of a company, giving it access to early payments.

FINTECH

Investors apply for fintech investment banking license

A group of investors has applied to obtain a fintech investment banking license from the Financial Regulatory Authority (FRA) for an M&A-focused firm, the investors’ legal advisor, Dreny & Partners, said in a press release (pdf). The investors include Mohamed Aboulnaga Nagaty, founder of M&A advisory outfit Pie Consulting and co-founder of Halan (now MNT-Halan), founding partner of Amer Group Omar Amer, and Omar and Adham Wagdy, founders of Basita Holding for Financial Investments.

The group is also working to establish a holding company that will encompass Pie Consulting and its subsidiary Exits, an online M&A marketplace Pie recently acquired, Dreny & Partners founding partner Moataz El Dreny told Enterprise. El Dreny expects the license to be obtained within a couple of months.

IN OTHER FINTECH NEWS-

  • Fintech company Raqamyat is launching its operations and will offer e-payment solutions for e-commerce businesses and online retailers, it said.
  • Fintech player Lucky received the greenlight from the Central Bank of Egypt to launch its Lucky One Card, which allows customers to access cashback rewards, pay mobile bills, and withdraw and deposit funds. (Statement, pdf)

EDITOR’S NOTE- Corrected on 16 June, 2022

An earlier version of this story had identified Mohamed Aboulnaga Nagaty as the CEO and co-founder of Egypt-based Klivvr. The story has been updated to reflect the fact that Nagaty no longer holds this position.

MOVES

Lafarge has appointed Jimmy Khan (LinkedIn) as the company’s new Egypt CEO, succeeding Solomon Baumgartner Aviles (My Morning Routine), according to a statement (pdf). Khan has been the CEO of Lafarge Zambia since 2018, and previously served as CEO for Lafarge Mauritius and Seychelles. He has worked with the group for the past 18 years.

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COMMODITIES

No end in sight for the wheat shortage

Global markets could miss out on three consecutive Ukrainian wheat harvests, Ukraine’s Agriculture Minister Mykola Solskyi told Reuters. “We cannot take out [to export] last year’s crop, we cannot harvest and take out the current one, and we do not particularly want to sow the next one,” Solskyi said. Ukraine’s wheat is usually sowed in the fall and harvested during July and August, suggesting that the shortage could last until mid-2024.

What about this season’s crop? Ukraine is currently unable to harvest at least 5 mn tons of wheat from its 2022 crop, which have been planted on currently-occupied territory and cannot be harvested. Ukraine has some 30 mn tons of grain trapped in its silos, taking up half of the grain storage capacity that is still under its control. And with Russia blocking its ports, the best part of the 60 mn tons of grain and oilseed surpluses could end up trashed with nowhere to go.

The problem: Russia’s blockade of the Black Sea ports has forced Kyiv to turn to rail, road, and river transport to get its grain out of the country. Recently, Ukraine started exporting grain via two routes through Poland and Romania, but the process is slow and expensive due to logistical difficulties. A shipment of Ukrainian wheat will soon make its way to Egypt from Romania, marking the first of its kind since the war broke out.

Is the Baltic Sea the answer? Exporters in Ukraine have opened a new route via the Baltic Sea in a step that could help get agricultural commodities out of the country, according to Bloomberg. A shipment of Ukrainian corn sent from Poland arrived in Spain on Monday, raising hopes that the country will begin to clear its huge backlogs.

All of this has heightened global food insecurity …: Russia and Ukraine provide around a third of the world’s wheat and Prior to the war, Ukraine’s monthly grain exports used to reach 6 mn tons, but that number has been significantly slashed since the war broke out. The country exported 300k tons of grain in March and 1 mn tons in April. Solskyi is expecting exports to exceed 2 mn tons this month.

What this means for us: Russia and Ukraine together accounted for around 80% of Egypt’s wheat imports. Egypt could face an extra USD 10.2 bn burden next fiscal year if wheat and oil prices remain at their current elevated levels, Finance Minister Mohamed Maait said this week. The prospects of the continued war has us looking elsewhere for wheat, including from India — with whom we could still do trade in a potential wheat-for-fertilizer pact that has drawn criticism from some other nations.

Both India and Egypt are backing policies that would see them bar potential exports of critical wheat crops that is being opposed at the WTO meetings, with us extending our own ban on wheat exports.

G7 countries have restated their support to help ease Egypt’s food crisis: “The G7 is standing by their commitment to support Egypt through this crisis caused by Russia’s war,” G7 ambassadors to Egypt said in a statement yesterday. The group is increasing support to the World Food Programme’s operations in Egypt and is offering bilateral assistance, they said, adding that they are “closely consulting” with the government on the crisis.

Goodbye wheat, hello sunflower? Ukrainian farmers could soon substitute their wheat crops with something lighter — making it cheaper to ship — and more expensive to sell, like sunflower, which farmers are already substituting for corn crops, the minister said.

enterprise

LAST NIGHT’S TALK SHOWS

The government’s auto strategy took center stage on the airwaves last night: Prime Minister Moustasfa Madbouly’s speech on the government’s automotive strategy and a number of MoUs signed on the sidelines led the conversation on the airwaves last night, with Masaa DMC (watch, runtime: 1:49), Al Hayah Al Youm (watch, runtime: 8:01), Yahduth Fi Masr (watch, runtime: 8:51), and Ala Mas’ouleety (watch, runtime: 30:15) all covering the news.

The drive to localize: Speaking at the East Port Said Industrial Zone, the PM said that the government’s goal is to expand the local production of vehicles and localize supply chains by supporting domestic feeder industries. The country has spent USD 4 bn on importing cars over the past year, which is not sustainable should car ownership continue to rise in the coming years, he said.

One of the PM’s advisors gave a bit more clarity on Yahduth Fi Masr, telling show host Sherif Amer that incentives will be provided based on the level of investment and production, the quantity of local components used, and the adoption of eco-friendly technologies (watch, runtime: 8:51).

We’ve already seen some parts of the strategy in action: Changes to customs duties on hundreds of imported goods were passed by the House earlier this month. Included in these were tax breaks for manufacturers who source at least 60% of components from local suppliers, and a 2% tariff on equipment used for EV charging stations and natgas filling stations, as well as a number of components used in electric buses.

Want a primer on the strategy and what auto players want to see from it? Read our in depth Inside Industry poll here.

A number of agreements were signed at the event:

  • A new car assembly factory: Egyptian International Motors, the Suez Canal Economic Zone (SC Zone), the Sovereign Fund of Egypt (SFE) and the East Port Said Development Company (EP) signed an MoU to explore building a factory capable of producing 75k cars a year.
  • The study that could make it happen: UK engineering consultancy PAC Group signed an MoU to conduct a feasibility study on the proposed factory.

Fury as the Pharaohs collapse in 4-1 loss to South Korea: The national team’s 4-1 loss to South Korea got the talk show heads furious, with Ala Mas’ouleety’s Ahmed Moussa slamming the team for their bad performance and describing the game as a “disgrace” (watch, runtime: 4:54). He said no resignations were yet made from the Egyptian Football Association (EFA) after a week of disappointing performances, the latest being the Pharaohs' embarrassing 2-0 loss to Ethiopia. The EFA will announce several decisions on Thursday, Moussa said, expecting the association to name a new coach for both the national and olympic football teams among other decisions. Al Hayah Al Youm (watch, runtime: 19:03), Masaa DMC (watch, runtime: 11:22), and Kelma Akhira (watch, runtime: 7:23) also covered the result.

Uncle Joe goes to Riyadh: Yesterday’s news that President Joe Biden will make his first visit to the region next month got wide coverage: Kelma Akhira (watch, runtime: 19:20), Ala Mas’ouleety (watch, runtime: 4:48) and Yahduth Fi Masr (watch, runtime: 3:23).

EGYPT IN THE NEWS

There’s nothing to see here this morning, folks. Move along.

ALSO ON OUR RADAR

Telecom Egypt (TE) and Aqua Comms inked a crossing and landing agreement for the Europe Middle-East India Connect 1 (EMIC-1) subsea cable in Egypt. The cable will connect Barcelona to Mumbai and transit Egypt on land between Ras Ghareb and Port Said, TE said in a statement yesterday.

Other things we’re keeping an eye on this morning:

  • Petcare provider Vetwork has raised a bridge round from members of the Alexandria Angel Network and undisclosed Saudi investors, according to a release (pdf).
  • Amazon Egypt is launching its premium membership program Amazon Prime, offering delivery without charge, discounts and access to its streaming and gaming services. (Statement, pdf)
  • US IT infrastructure provider Kyndryl will provide cloud services to Qalaa Holdings’ Taqa Arabia. (Press release)
  • Authorities have released 24 pretrial detainees charged with joining an outlawed group and disseminating false news in separate cases, human rights lawyer Khaled Ali wrote on social media. (Facebook)
  • An Egyptian-German archeological mission uncovered granite stone blocks from King Khufu’s reign in Heliopolis. (Statement)

PLANET FINANCE

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OPEC expects oil demand growth to fall to 2 mn barrels per day (bpd) or less in 2023, compared to an expected growth of 3.36 mn bpd in 2022, Reuters reports, citing sources in the know. Oil prices have hit record highs, pushing up inflation — but these high prices are now eating into growth projections for 2022 and forecasting for slower growth in 2023. OPEC’s official forecast for 2023 is expected to be published in July.

ALSO IN PLANET FINANCE-

  • Coinbase slashes jobs as crypto winter deepens: Crypto exchange platform Coinbase has laid off almost a fifth of its workforce amid a plunge in crypto prices. Shares in the company have plunged 85% since November in response to the tanking crypto market, which has seen BTC lose more than 60% of its value in the same period. (Statement)
  • Mubasher will not be deterred by the meltdown: Mubasher will launch its MENA crypto trading platform Ducrypto on Thursday, allowing users to trade in BTC, Ripple, Ethereum, Dogecoin and other cryptocurrencies. (Statement)
  • No IPO for Coca-Cola’s African business this year: Coca-Cola Co is pushing a planned IPO of part of its stake in Coca-Cola Beverages Africa to 2023 due to poor macroeconomic conditions. (Statement)

Up

EGX30

9,981

-0.3% (YTD: -16.5%)

Up

USD (CBE)

Buy 18.70

Sell 18.78

Up

USD at CIB

Buy 18.72

Sell 18.78

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

12,021

-0.3% (YTD: +6.6%)

Up

ADX

9,547

+0.9% (YTD: +12.5%)

Up

DFM

3,297

+0.3% (YTD: +3.2%)

Down

S&P 500

3,735

-0.4% (YTD: -21.6%)

Down

FTSE 100

7,187

-0.3% (YTD: -2.7%)

Down

Euro Stoxx 50

3,475

-0.8% (YTD: -19.2%)

Down

Brent crude

USD 121.17

-0.9%

Up

Natural gas (Nymex)

USD 7.32

+1.8%

Down

Gold

USD 1,808.90

-0.3%

Down

BTC

USD 21,364

-7.0% (YTD: -53.4%)

THE CLOSING BELL-

The EGX30 fell 0.3% at yesterday’s close on turnover of EGP 683 mn (18.2% above the 90-day average). Foreign investors were net sellers. The index is down 16.5% YTD.

In the green: CIRA (+2.4%), Egypt Kuwait Holding-EGP (+2.2%) and MM Group (+1.9%).

In the red: TMG Holding (-3.3%), Credit Agricole Egypt (-2.1%) and e-Finance (-1.9%).

hardhat

Using data to improve efficiency in our traditional infrastructure: Enterprise sits down with Pylon’s Ahmed Ashour. Having recently raised USD 19 mn in a seed funding round, and already hit profitability following its 2017 launch, infrastructure management platform Pylon is on a roll. We sat down with Pylon’s co-founder and CEO Ahmed Ashour for a deep-dive into how the company’s data-driven software is helping to make traditional infrastructure sectors — namely, electricity and water distribution — more efficient.

The main challenge facing water and electricity providers: Substantial revenue losses from structural inefficiencies. This lost revenue could amount to close to USD 2 bn per year in Egypt alone, and some USD 400 bn in emerging markets, says Ashour. It comes primarily from inefficient revenue collection, electricity or water theft from tampering, and leakages or technical losses happening across the networks, he adds. Upgrading infrastructure to make it more efficient is usually a cost-intensive undertaking for utility providers, Ashour says.

This is where Pylon comes in: Pylon’s software collects and analyzes vast amounts of data, identifying systemic inefficiencies that providers can take immediate steps to address, says Ashour. The AI embedded in its tech can make forecasts and recommendations for more efficient, lower-emissions usage. “In essence, we develop the technological layer for the infrastructure sector,” Ashour says.

So how does it work? Pylon supplies software, communication technology and smart meters to its subscribers, says Ashour. The software — which it connects to all the subscriber’s different assets — has different functions, but is broadly focused on data collection, data crunching or analysis, and feedback mechanisms, some of which are automated, he adds.

For electricity, it’s data collection, Jim, but not as we know it: Electricity utilities are used to getting a single data point a month, by sending someone to read the electricity meter, Ashour tells Enterprise. “But our smart meters take a reading every 15 minutes, and each one of these measures around 32 different parameters,” including consumption, the volts and amperes of the electricity, the load profile (the electricity usage going up and down at different intervals), and the quality of the electricity provided. “The more data we can collect, the greater our insights and understanding, and we can make better forecasts and decisions.”

When it comes to smart technology, not as much can be measured and forecast with water, because water meters are battery operated, says Ashour. “Our water forecasting is mainly about usage. We can look at the direction and speed of the flow, but at the moment we can’t conduct as thorough an analysis as in the electricity sector.”

The data is then communicated to a centralized data center through power line carriers, broadband or even radio frequencies, says Ashour. Once it arrives in the data center — which could be in a physical space attached to the customer’s location, or in the cloud — the system starts the data crunching process.

Data analysis informs and directs the different functions of the platform: Pylon’s machine learning software can cross reference newly-collected data with data already in its system to detect suspicious patterns of activity, indicating electricity theft, for example, Ashour says. When the system flags a suspicious pattern, it’s automatically assigned to a human inspector, who investigates the situation. The software can also show companies where in the network their biggest losses from leakages or theft are occurring. It can help pinpoint the root cause of a problem, and where infrastructure needs to be fixed or maintained, he adds.

Along with system optimization, in response to demand: Pylon’s system can put a limit on individual users’ electricity consumption during peak demand hours. Electricity distribution companies often struggle with supply when demand is at its peak and are forced to either cut the electricity supply in different areas, or to install more generation capacity — which may then only be used for a few hours a day, a few months a year. Pylon can limit consumption to 40 or 50 amperes during peak hours, so individuals still have electricity access but it’s capped, he adds.

And lower-emissions electricity supply: Pylon can maximize generation from renewables, by using data analysis to predict solar or wind power generation during a given time period. “We can then link electricity providers to sources of conventional energy, like gas turbines, to supplement what’s needed,” says Ashour. The company tries to ensure gas plants aren’t used during peak demand hours, which leads to higher CO2 emissions, he adds.

How the money comes in: “We consolidated everything into the technology,” says Ashour. “There’s a new idea that software is eating infrastructure, which is what we adopted. It basically means you provide the whole service in the software layer. We minimized the need for hardware, and built a lean solution from scratch. So we focus on making our product very efficient, solving all the challenges, and constantly enhancing our software. Then we take this software, and sell it to numerous customers through our subscription model.”

Pylon’s service model is subscription-based, with utility providers usually paying over a 10-year period: “There’s no upfront payment or substantial one-time investment for customers,” says Ashour. Paying in installments over a long period makes it a more cost-effective service for the utilities providers, he adds.

Ashour and his co-founder Omar Radi think of the company as the Android of the smart grid — meaning the company integrates its own software with hardware provided by partners from all over the world. It works with around 30 different hardware providers from locations including Egypt, Europe, China, and the US. Pylon also partners with Amazon Web Services for its data storage, and has designed its own cloud storage offering, says Ashour.


Your top infrastructure stories for the week:

  • New crude storage facility: The Oil Ministry plans to build a EGP 1.8 bn crude oil storage facility south of Cairo, which would receive crude from Ain Sokhna and transfer it to the Assiut oil refinery.
  • Alameda hospitals to get new equipment + operating systems: Alameda Healthcare has signed an MoU with the Egyptian arm of medtech firm Medtronic that will give Alameda hospitals access to Medtronic’s full portfolio of “cutting-edge medical devices, including newly launched and premium products.”
  • IT infrastructure contractor Benya Group is looking to raise USD 150 mn via a private placement before the end of 2Q2022 to finance its expansion plans in Africa.
  • SpaceX launched the Nilesat 301 satellite from Cape Canaveral, sending it into orbit where it will provide TV broadcasting and internet services to Egypt and other parts of Africa and the Middle East.

CALENDAR

OUR CALENDAR APPEARS in two sections:

  • Events with specific dates or months are right here up top
  • Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.

JUNE

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

15-18 June (Wednesday- Saturday): Afreximbank annual meetings, St. Regis Almasa Hotel, new capital, Egypt.

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

16 June (Thursday): EU-Egypt Sustainable Food Value Chain conference, Grand Nile Tower Hotel, Cairo.

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

21-22 June (Tuesday-Wednesday): Aswan Forum for Sustainable Peace and Development, Cairo.

21-23 June (Tuesday-Thursday): Commonwealth Business Forum, Kigali, Rwanda.

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

25-27 June (Saturday-Monday): Big 5 Construct, Egypt International Exhibition Center.

26 June (Sunday): The deadline for private companies to pre-register ahead of bidding for the second phase of the PPP national project to establish and operate 1k language schools.

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

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

30 June (Thursday): Deadline for bids for National Democratic Party HQ redevelopment contract.

June: Egypt will launch a unified ticketing system for all means of transport at the Adly Mansour Interchange Station.

June: Egypt and Israel will sign an agreement with the EU to increase LNG exports.

JULY

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

July: Fuel pricing committee meets to decide quarterly fuel prices.

July: Actis’ expected sale of its majority stake in Lekela to Infinity and Masdar’s Infinity Power.

First week of July: The national dialogue called for by President Abdel Fattah El Sisi kicks off.

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

1 July (Friday): Official rollout of e-receipt system begins.

8 July (Friday): Arafat Day.

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

21 July (Thursday): European Central Bank monetary policy meeting.

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

30 July (Saturday): Islamic New Year.

Late July – 14 August: 2Q2022 earnings season.

AUGUST

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

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

SEPTEMBER

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

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

6-9 September (Tuesday-Friday): Gate Travel Expo 2022, El Kobba Palace, Cairo.

8 September (Thursday): European Central Bank monetary policy meeting.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

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

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

26–27 September (Monday-Tuesday): The Africa Women Innovation and Entrepreneurship Forum (AWIEF) at the Cairo Marriott Hotel.

OCTOBER

October: Fuel pricing committee meets to decide quarterly fuel prices.

1 October (Saturday): Use of Nafeza becomes compulsory for air freight.

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

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

10-16 October (Monday-Sunday): World Bank and IMF annual meetings chaired by CBE Governor Tarek Amer, Washington, DC.

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

27 October (Thursday): European Central Bank monetary policy meeting.

Late October – 14 November: 3Q2022 earnings season.

NOVEMBER

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.

3-5 November (Thursday-Saturday): Egypt Fashion Week.

4-6 November (Friday-Sunday): The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

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.

15 December (Thursday): European Central Bank monetary policy meeting.

DECEMBER

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

JANUARY 2023

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

January: Fuel pricing committee meets to decide quarterly fuel prices.

MAY 2023

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

EVENTS WITH NO SET DATE

2Q2022: The Sovereign Fund of Egypt will invest in two companies in the financial inclusion and non-banking financial services sectors.

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

End of 2Q2022: Door for bidding for the contract to redevelop the site of the former National Democratic Party HQ to close.

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.

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.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

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

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

**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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