Tuesday, 2 August 2022

AM — Maait shoots down talk of a USD 15 bn IMF facility

TL;DR

WHAT WE’RE TRACKING TODAY

Happy hump day, wonderful people. It’s a busy news day today — and just a little bit tense as we warily look eastward to see what comes of US House of Representatives Speaker Nancy Pelosi’s visit to Taiwan. Beijing is furious at the prospect of Pelosi visiting Taipei to meet with Taiwan’s president.

THE BIG STORY HERE AT HOME is Finance Minister Mohamed Maait shooting down the notion that we’re seeking USD 15 bn in financing from the IMF. We have the rundown on all of this and more, below.

DATA POINT #1- Net FDI inflows to Egypt almost tripled to USD 4.1 bn in the three months ending 31 March, up from USD 1.4 bn in the same period last year, which corresponds to the third quarter of the state’s fiscal year. That marks the strongest single quarter of FDI inflows since 2018, according to central bank data picked up by the local press yesterday.

Where is the BOP? We’re still waiting for the central bank to publish full balance of payments figures for 3Q 2021-2022, which will give us a look at how the spillover effects from the war in Ukraine has affected the flow of goods, services and capital in and out of the country.

DATA POINT #2- We’re reproducing (a little) slower than we used to be: Egypt succeeded in lowering the birth rate to 21.2 per 1k in 2021, down from 30.2 per 1k in 2015, Education and Acting Health Minister Khaled Abdul Ghaffar said in a speech to mark national population day.

HAPPENING TODAY-

The Madbouly government’s public consultations on its state ownership policy continue today, with a workshop for representatives from the textiles sector. Every Sunday, Tuesday, and Thursday see workshops on how privatization plans will affect specific industries. You can find more details on the schedule of the meetings here.

Egypt and the UN will today convene the first in a series of regional climate roundtables in the lead-up to COP27 in November. African climate negotiators are in Addis Ababa, Ethiopia for the next three days to discuss climate financing mechanisms. COP27 President Sameh Shoukry, Mark Carney, UN climate envoy and co-chair of the Glasgow Financial Alliance for Net Zero, and UN Deputy Secretary-General Amina Mohamed will be among those in attendance.

TOMORROW-

Our friends at Chimera should find out tomorrow how much of Beltone Financial they have acquired via a mandatory tender offer. Shareholders have until Wednesday, 3 August, to subscribe to Chimera Investment’s MTO for the financial services firm. The Abu Dhabi-based outfit has already locked in a 56% stake in Beltone after Orascom Financial last week agreed to sell its shares. Chimera is offering to pay EGP 1.485 per share for up to 90% of Beltone, valuing it at around EGP 690 mn.

PMI figures are out tomorrow: We’ll get an idea of how the private sector fared in July when S&P Global releases its latest purchasing managers’ index (PMI) tomorrow. The index fell to its lowest level in two years in June as surging inflation hit demand and output.

National Dialogue board will talk about the economy: The board of trustees overseeing preparations for the National Dialogue will meet tomorrow to discuss the economic agenda.

THE BIG STORY ABROAD-

BECAUSE ONE GLOBAL POLITICAL CRISIS JUST ISN’T ENOUGH… Washington and Beijing appear to be on a collision course after sources confirmed yesterday that House Speaker Nancy Pelosi will travel to Taipei on Tuesday and will reportedly meet with Taiwan’s president, defying warnings from China that her visit could provoke a military response. Beijing said yesterday that its military will “not sit idly by” if Pelosi visits the island and its president, Xi Jinping, last week warned Joe Biden not to “play with fire” and said that China would “resolutely” defend its territorial claims over Taiwan. Beijing, which claims Taiwan as part of China, has been holding military exercises in the South China Sea this week ahead of Pelosi’s trip to the region.

Asian markets are down sharply this morning — traders aren’t welcoming the news any more than is the editorial board of the Financial Times, which is calling Pelosi’s visit “ill-conceived and ill-timed”. The salmon-coloured paper urged both sides to show restraint if the visit does prompt a furious reaction from Beijing. Markets in Europe look set to come under selling pressure at the opening bell, and futures also suggest Wall Street and Bay Street will open lower today.

The news is everywhere in the foreign press: Bloomberg | Reuters | Financial Times | CNBC | WSJ | NYT | Washington Post.

ALSO GETTING PLAY in the global business press this morning: The US securities regulator has charged (pdf) 11 people with allegedly operating a huge crypto pyramid scheme that fraudulently raised USD 300 mn from investors. Reuters, CNBC and the Financial Times have more.

IN NON-BUSINESS NEWS- A US drone strike has killed Ayman El Zawahiri, a top leader of Al Qaeda, US President Joe Biden announced overnight. The story is getting prominent billing on the front pages from the New York Times to the Wall Street Journal and beyond. The terrorist leader, 71, was an Egyptian national.


ICYMI #1- Ukraine is officially a wheat exporter again… A vessel left the port of Odesa for Lebanon yesterday, becoming the first ship to carry grain out of Ukraine via the Black Sea since Russia invaded the country in February. The ship is carrying 26k tons of corn and is expected to arrive at the inspection location in Turkey’s territorial waters tomorrow before taking its cargo to Lebanon.

…but things aren’t back to normal just yet: Ukrainian exports are still in a “trial period,” with a limit of three ships a day traversing the new safe-passage corridors established as part of the country’s pact with Russia and Turkey, Ukraine’s Infrastructure Minister Oleksandr Kubrakov told Bloomberg TV yesterday (watch, runtime: 4:53). “It’s important for us to make it clear that this route is safe, and then we’ll start increasing the number of vessels,” Kubrakov said.

Exports could rise to as much as 3 mn tons a month in the next four to six weeks if all goes well, Kubrakov added.

ICYMI #2- The women’s Euro 2022 wrapped on Sunday night: England won their first major tournament with a 2-1 victory against Germany at Wembley. The tournament hosts were drawn 1-1- with the eight-time champions heading into extra time — and got the deciding goal with 10 minutes left on the clock when substitute Chloe Kelly scored at close range. The BBC has the highlights here (watch, runtime: 3:50).


** CORRECTION- Toyota has sold a 50% stake in the Egyptian Offshore Drilling Company: In an article last week, we reproduced an error in the domestic press that claimed Toyota had sold a 30% stake in the company to EGAS; the story cited Shawkat Elmaraghy, the managing director of transaction broker Prime Securities. We got on the phone with Elmaraghy yesterday, who confirmed information published in an Oil Ministry statement yesterday that Toyota had actually sold half of the company. EGAS now owns 85% of Egyptian Offshore Drilling Company, while Ganope (South Valley Egyptian Petroleum Holding Company) holds the remaining 15%.

CIRCLE YOUR CALENDAR-

We’re on the lookout for a number of key macro figures this week and next:

  • Foreign reserves figures for July will likely be released at the end of this week or the beginning of the next;
  • Inflation data for July will land on Wednesday, 10 August.

The Central Bank of Egypt will meet to discuss interest rates on Thursday, 18 August.

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

***

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*** 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: Could there be a wellspring of untapped energy beneath our feet? We’ve been a pioneer for the region on harnessing wind and solar energy, and we’re now forging the way on green hydrogen — but there’s been little attempt to date to map and tap Egypt’s geothermal potential. In this week’s Gong Green, we take a look at whether thermal springs in places like the Gulf of Suez could be a viable source of renewable energy.

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ECONOMY

Maait dials down expectations for IMF loan

Maait shoots down talk of a USD 15 bn IMF loan: “That figure is completely inaccurate,” Finance Minister Mohamed Maait told Al Kahera Wal Nas’ Khairy Ramadan late Sunday evening (watch, runtime: 22:43) when asked if Egypt is requesting a USD 15 bn loan from the international lender. Maait maintained the number is definitely lower, without disclosing an exact figure, and emphasized that Egypt’s goal is to secure support from the Fund for structural reforms.

Who said we need USD 15 bn? Goldman Sachs estimated in July that Egypt may need to secure USD 15 bn from the IMF to meet its financing needs over the next three years, according to Bloomberg. BNP Paribas has said previously that we could secure as much as USD 10 bn from the IMF to plug our funding gap.

Maait is not the first to dial back expectations for a super-sized package: Central Bank of Egypt Governor Tarek Amer said earlier this year that negotiations are focused on a “limited” amount of funding since Egypt has exhausted its borrowing quota. The country has borrowed USD 20 bn from the IMF since 2016, and though repayments on 2016’s USD 12 bn EFF started last year, we’re still far beyond our quota. This means that further borrowing will be under exceptional access criteria, likely requiring us to comply with more stringent conditions.

We need to iron out some differences with the IMF before agreeing on the loan: The IMF’s executive board last week called on the government to take “decisive” steps on fiscal and structural reforms to reduce its exposure to external shocks. Though neither side has gone into details about the substance of the negotiations, the Fund will likely want to see more flexibility in the exchange rate.

The government has called on the IMF to ease up on its demands: El Sisi in June made an indirect appeal to the IMF to ease up on some of its lending conditions, intimating that the country “cannot tolerate” some aspects of the reforms IMF officials were advocating. In response to a question about El Sisi’s statements, Maait suggested that the Fund should respond to Egypt’s loan request in the same as it did in 2020 when it borrowed USD 8 bn to support it through the covid crisis. “Economic reforms need a relatively stable economic environment to succeed,” Maait said, adding that the current monetary environment is even more difficult than during the pandemic because of the pressure on global supply chains and the inflated prices of essential commodities. “We cannot approach the current moment as though it’s normal.”

Background: Egypt was forced to request fresh financing from the IMF earlier this year due to headwinds caused by the fallout from the Ukraine war and tightening global financial conditions. Egypt’s balance of payments has come under pressure from surging food and energy prices as well as a heavy sell-off from global emerging markets, while rising interest rates in the developed world are raising questions about the affordability of our large external debt load, which has more than doubled over the past five years.


SPEAKING OF THE EGP- Capital Economics expects the EGP to ease another 10% against the greenback this year as rising external pressures force policy makers to act. Going against the consensus — which sees the EGP at around 19.00 to the USD by the end of the year — Capital Economics thinks it’ll be closer to 21.00, followed by a further fall towards 25.00 by the end of 2024. The CBE has already allowed the currency to decline about 20% this year; 19.00 to the greenback represents the EGP’s lowest level since December 2016.

INVESTMENT WATCH

Aldar could invest USD 1.5 bn in Egypt, Saudi + the UAE over the next year

Emirati real estate giant Aldar Properties still sees potential to invest another USD 1.5 bn in Egypt, Saudi Arabia and the UAE over the next 6-12 months despite a higher interest rate environment, CEO Talal Al Dhiyebi told Bloomberg TV yesterday (watch, runtime: 6:17).

Land lovers: The company — which together with Abu Dhabi wealth fund ADQ acquired upmarket real estate developer SODIC last year — now wants to add to its land bank in Egypt. “We want to expand the land bank in key areas from the North Coast to West Cairo to East Cairo and then in future on the Red Sea. We’re in a number of discussions on expanding our land bank,” Al Dhiyebi said.

Still holding out hope for MNHD? SODIC will not consider raising its offer for Madinet Nasr Housing and Development (MNHD) until it is allowed to do due diligence and get a deeper understanding of the company’s assets, Al Dhiyebi said. MNHD’s board rejected last month SODIC’s non-binding offer of EGP 3.20-3.40 per share and suggested that it would not allow the company to do due diligence until it ups its bid. “The ball is really back in their court,” Al Dhiyebi said.

The company is also interested in the retail + education sectors: Aldar’s CFO said in February that the company could spend at least AED 5 bn (c. USD 1.4 bn) on acquisitions in Egypt, the UAE and Saudi Arabia but at that time its focus was on retail and education assets.

“Egypt is a market that we really believe in for the long term. It’s self-sustained, the population is there,” Al Dhiyebi added. “There’s some macroeconomic headwinds, but long term we think the prospects are very positive.”

STARTUP WATCH

Homzmart closes USD 23 mn pre-series B round

Homzmart just closed one of Egypt’s largest funding rounds this year: Furniture and home goods marketplace Homzmart has closed a USD 23 mn pre-series B round, it said in a statement (pdf) yesterday. The round saw participation from Saudi VC STV as well as existing investors including Impact46, Outlier Venture Capital, Rise Capital and Nuwa Capital.

About Homzmart: Founded in 2019 by former Jumia execs Mahmoud Ibrahim (LinkedIn) and Ibrahim Mohamed (LinkedIn), the platform’s B2C marketplace allows customers to purchase furniture products from a variety of brands and merchants. The company serves 25 mn households in Egypt and Saudi Arabia and has more than 150k products in its marketplace, it said.

The company has raised some USD 40 mn to date, having completed a USD 15 mn Series A round in 2021 and a USD 1.3 mn seed round a year prior.

Homzmart entered the Saudi market at the end of last year after tripling its local operations and in January said it was eyeing expansion into South Asian markets. It also made a pretty interesting M&A transaction back in March, adding a core technology to its business with the acquisition of Berlin-based AI interior design startup MockUp Studio.

** Mahmoud Ibrahim was recently our Founder of the Week: He talked to us about what led him to setting up his own company and shared some advice for aspiring founders.

CAPITAL MARKETS

EFG Hermes tops EGX brokerage table in July

EFG Hermes once again topped the EGX’s brokerage league table in July, with a market share of 16.7%, according to figures from the EGX (pdf). Rounding out the top five were CI Capital (14.6%), Prime Securities (6.5%), Arqaam (4.8%), and Cairo Capital Securities (3.9%).

EARNINGS WATCH

Macro Group profits rise in 2Q 2022 despite economic headwinds

Macro Group saw its bottom line grow 36% y-o-y to EGP 40.7 mn in 2Q 2022, according to the company’s latest financial statement (pdf). Revenues jumped 47% y-o-y to EGP 170.2 mn in the April-June period. The results marked a “strong performance amidst what has been a challenging period, both locally and globally,” Chairman Ahmed Elnayeb said in the company’s accompanying earnings release (pdf). “We believe that Macro’s healthy balance sheet, implementation of disciplined cost controls, and multi-channel growth strategy uniquely positions the group to achieve sustainable growth.”

Driving growth: Macro Group attributed revenue growth during the first half of the year to the company’s decision to hike prices, which rose 20% y-o-y. Sales volumes increased 9% y-o-y during the six-month period. Revenues from the company’s premium brands more than doubled y-o-y in 2Q 2022 to EGP 15.4 mn. Macro also launched six new products during the quarter, and moved to raise overseas sales to hedge against the recent currency devaluation, it said.

M&A Watch: The cosmeceutical firm is in the process of finalizing its acquisition of nutraceutical company Zimmer, pending the signing of final contracts, according to the release.

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LAST NIGHT’S TALK SHOWS

Metro and train fare hikes will likely be implemented later this month, in tandem with the government’s measures to expand social security, Transport Minister Kamel El Wazir told Sada El Balad last night (watch, runtime: 1:06:06). Prices will not rise by more than 25%, the minister said, adding that the proceeds will be used to help the Egyptian National Railways (ENR) reduce its debt.

Breaking down the costs of widening and upgrading the Ring Road: The first phase of the Ring Road’s expansion — which covered 76 km, spanning the Alexandria Agriculture road to New Cairo — cost around EGP 11.21 bn, El Wazir said. The bill for the second phase of expansion — 34 km spanning the Alexandria Agriculture Road to El Warraq and Wahat road — will come in at around EGP 15 bn, he said. The costs are higher for the second phase due to inflation and rising prices, he added, and denied rumors that the ministry plans to impose toll fees on the newly-expanded road.

Expanding social security: The addition of 1 mn families to the Takaful and Karama social security program will bring the total number of families in the program to 5 mn, accounting for about 20% of the population, Prime Minister Moustafa Madbouly said at a press conference (watch, runtime: 12:02) yesterday. Madbouly’s press conference also got airtime on Sada El Balad (watch, runtime: 8:33 | 4:03), and Al Hayah Al Youm (watch, runtime: 2:24).

Arm of the military will build Middle East’s largest polyethylene complex: President Abdel Fattah El Sisi yesterday ordered the construction of an industrial polyethylene complex in Upper Egypt. The news came out of a meeting with the military’s National Service Products Organization. The facility, which is being billed as the largest of its kind in the region, will produce plastic for the local market, reducing reliance on imports. The meeting got coverage from Al Hayah Al Youm (watch, runtime: 3:13) and Masaa DMC (watch, runtime: 8:04).

EGYPT IN THE NEWS

It’s another quiet morning for Egypt in the foreign press: The champions of this year’s Egyptian Premier League will inaugurate Qatar’s Lusail stadium ahead of the World Cup in November in a game against Saudi league champions Al Hilal on 9 September, AFP reported yesterday. At the moment that looks to be Zamalek, who are seven points clear at the top of the table with six games left to be played. The final games of the 2021-2022 season will take place on 29 August.

ALSO ON OUR RADAR

A step closer to exporting covid vaccines: Egyptian medical authorities are the first in the region to achieve the World Health Organization’s (WHO) second-highest regulatory classification, bringing the country closer to exporting covid-19 jabs, the global health body said in a statement yesterday. Reaching the ML-3 level of national vaccine regulation allows Egyptian vaccine makers to apply to the WHO to have their products pre-qualified and listed for emergency use. This will allow Egyptian companies to export covid vaccines outside our borders, the WHO said.

The first phase of the Decent Life initiative is set to be completed by the end of 2022, Prime Minister Moustafa Madbouly said in a press conference yesterday (watch, runtime: 12:02). The initial phase was originally scheduled for completion before the start of the current fiscal year in July. Read this for more information on the Decent Life initiative.

Oh, Canada: Oil Minister Tarek El Molla and the head of the Royal Canadian Mint discussed potential cooperation in Egypt’s gold mining industry. (Statement)

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

  • Banque Misr sold its entire 10% stake in Egyptian Financial and Industrial (EFIC) to Midfert Misr Investment for EGP 145.3 mn. Midfert now owns c. 22% of the company. (Statement, pdf | Statement, pdf)
  • Egyptians can travel visa-free to Serbia in August and September as long as the trip is booked through a Serbian travel agency and they have proof of a return trip. (Statement)
  • The National Telecom Regulatory Authority (NTRA) handed out EGP 21 mn of fines to telecom companies in 2Q 2022 for failing to meet service quality standards. (Al Borsa)

PLANET FINANCE

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Global M&A activity has slowed dramatically this year: The value of global M&A transactions has fallen almost a third so far this year as the conditions that enabled an explosion of dealmaking in 2020 and 2021 go into reverse. Mergers worth USD 2.4 tn had been announced globally as of late July, down 30% from the same period in 2021, according to Dealogic data cited by the Wall Street Journal.

The culprits: Rising interest rates, soaring inflation and economic uncertainty fuelled by the war in the Ukraine are all putting a damper on activity. This comes after a booming year for M&A activity, where loose monetary conditions spurred a buying spree that saw mergers worth almost USD 6 tn.

It’s not looking good for 2H 2022 either: “Uncertainty is never helpful for M&A,” Anu Aiyengar, global co-head of M&A at JPMorgan Chase, told the newspaper, adding that she expects activity in the second half of the year to be even lower than the first half. This is partly because of the war and the fact that “private-equity, which has been a significant driver of the overall market, seems to be a little bit more on the sidelines,” she said.

MEANWHILE- Saudi crude exports rose in July to their highest levels since 2020, according to tanker-tracking data compiled by Bloomberg, which shows that 7.5 mn barrels a day left the country on average last month, up 14% from June. This came following the visit from US President Joe Biden to the kingdom earlier last month, where he lobbied Riyadh to increase export volumes to calm global oil prices, which have surged following Russia’s invasion of Ukraine.

EARNINGS WATCH- HSBC comfortably beat earnings estimates for 2Q 2022, yesterday reporting a post-tax profit of USD 5.8 bn as rising interest rates boost the bank’s loan income. The bank said it will move to gradually restore its full pre-pandemic dividend on the back of the strong earnings. (Earnings release, pdf)

ALSO FROM PLANET FINANCE-

  • M&A Watch: Saudi Aramco will buy motor oil and lubricant producer Valvoline’s global products unit in a USD 2.65 bn transaction. (Statement)
  • Recession Watch: Hong Kong has fallen into its second recession in three years as China’s zero-covid policy takes its toll on the financial hub. The city’s economy contracted 1.4% during 2Q 2022, following a 3.9% drop in 1Q. (Financial Times)
  • Crime Watch: Deutsche Bank is under fire for allegedly helping clients commit tax fraud, costing the German government mns in revenues. (Financial Times)
Down EGX30 9,423 -0.5% (YTD: -21.1%)
None USD (CBE) Buy 18.90 Sell 19.01
None USD at CIB Buy 18.93 Sell 18.99
None Interest rates CBE 11.25% deposit 12.25% lending
Up Tadawul 12,339 +1.2% (YTD: +9.4%)
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Down S&P 500 4,119 -0.3% (YTD: -13.6%)
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None Euro Stoxx 50 3,707 0.0% (YTD: -13.8%)
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Up Gold USD 1,787.70 +0.3%
Down BTC USD 23,011 -2.5% (YTD: -50.2%)

THE CLOSING BELL-

The EGX30 fell 0.5% at yesterday’s close on turnover of EGP 1.11 bn (26.8% above the 90-day average). Foreign investors were net sellers. The index is down 21.1% YTD.

In the green: GB Auto (+2.5%), e-Finance (+2.2%) and Alexandria Container and Cargo Handling (+2.1%).

In the red: Heliopolis Housing (-3.8%), Medinet Nasr Housing (-2.8%) and Fawry (-2.5%).

AROUND THE WORLD

Algeria is the latest MENA country to want in on BRICS: Algerian President Abdelmadjid Tebboune said that his country wants to join the BRICS group of major emerging economies, AFP reports. The group, which currently includes China, Russia, India, Brazil and South Africa, has received more attention this year as developing countries hedge against the economic warfare between the G7 and Russia and opt for multipolarity. Iran and Argentina have both applied to become members this year, while Egypt, Saudi Arabia and Turkey have also been said to be considering joining. Bids from new countries will reportedly be discussed at next year’s summit in South Africa.

Could Iran nuclear talks finally restart? A new round of talks on reviving the US-Iran 2015 nuclear agreement will “probably” kick off within days in Vienna, according to a senior Iranian official, according to Bloomberg.

greenEconomy

Could there be hope for geothermal energy in Egypt anytime soon? As we reported last week, Egypt has long been a regional leader in wind and solar energy production. Now, attention is turning to nascent technologies like green hydrogen as the new frontier for our renewables ambitions. But there’s one type of renewable energy that has been around for a while and seems to have passed us by: geothermal. Some researchers and officials are beginning to look into whether there’s untapped power potential underneath our feet.

Egypt has no geothermal capacity at present — but that’s hardly surprising when you consider that adoption of the technology has been slow around the world. The technology to capture sub-surface heat for power has existed for over a century, but only 27 countries currently use geothermal energy, according to US Energy Information Administration (EIA) data. Iceland is the poster child for the renewable power source, using it to generate about a quarter of its electricity needs and some 90% of its heating requirements.

On a global scale, geothermal capacity increased only 2% y-o-y in 2020. That’s slower than the average for the preceding five years, and well below the double-digit growth that would be needed to produce enough geothermal energy for the target mix that would get us to net zero carbon emissions by 2050, according to Paris-based multilateral energy organization the International Energy Agency (IEA).

One multilateral initiative is looking to build the expertise to get the sector off the ground here. Launched last year, the Geothermal Energy Capacity Building in Egypt (GEB) project aims to offer the first local graduate diploma in geothermal engineering, as well as launch our first educational pilot plant, geothermal labs at Egyptian universities, and establish a national geothermal society, all by 2024.

“This project will provide the opportunity for building an engineering knowledge foundation, both theoretical and practical, for the future use of geothermal energy in Egypt,” according to the academics leading the program (pdf).

Who’s involved: The government’s New and Renewable Energy Authority (NREA); the Oil Ministry’s South Valley Egyptian Petroleum Holding Company (Ganope); five Egyptian universities including project coordinator Cairo University; and European universities Bologna, Zagreb and Valladolid. Private sector industrial and engineering companies are also on board in the form of Spain’s Telur and Ecoforest, local infrastructure firm Bonian, and German-Egyptian environmental consulting company Georenco International. GEB is funded through a EUR 957k grant from the European Union’s Erasmus+ program.

But geothermal potential doesn’t exist everywhere. So do we have it? Geothermal reservoirs are concentrated along the boundaries of the Earth’s tectonic plates and need to be drilled and tested for their potential, much like an oil or gas reservoir, the EIA explains. Here at home, the most significant sources of that potential lie in the Gulf of Suez, the Red Sea, and the Western Desert, according to a 2020 geological study (pdf) by researchers at Saudi’s King Saud University and Egypt’s Benha University.

We’re not sitting on a wellspring of geothermal energy: The “majority of geothermal resources in Egypt can be categorized as medium to low-temperature potentials,” the 2021 paper’s authors write. The high-temperature assets that would be needed to produce on an industrial scale are few and far between, the study says, while low-grade resources make up the bulk of Suez and Western Desert assets and cannot be exploited for significant power generation.

The country’s total geothermal power potential is estimated to be somewhere in the range of 95 -221 mn kWh, according to a 2016 study (pdf). By comparison, some 165.7 bn kWh of our generated electricity is currently produced by fossil fuels.

But there is at least one promising site: The Hammam Pharaoun thermal spring area in the Gulf of Suez is “the best candidate area for installing the first power plant in Egypt,” the study’s authors say, citing the area’s accessibility, high potentiality, and high geothermal gradient. The area lies about 45 km outside of Suez and could hold between around 12-20 MW of thermal power potential. To put that into perspective, the smallest industrial-scale wind and solar power plants tend to start at 10 MW, while our mega Benban solar park produces some 1.5 GW annually.

There could be exploration of the area: In April 2016, the Oil Ministry’s Ganope and the NREA signed an MoU to explore geothermal energy potential around the Gulf of Suez, including Hammam Pharaoun and the Ayoun Moussa spring, but no work has been carried out since.

Though not suitable for power plants, our low-grade geothermal resources hold value for local communities: “Some direct low-grade geothermal applications are now in use in Egypt in the form of district heating, fish farming, agricultural applications and green houses,” the 2021 report reads. Besides being used in the majority of greenhouses in Western Desert oases, thermal waters are also a draw for tourists, it says, both as bathing spots and for medical treatments.


Your top green economy stories for the week:

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.

AUGUST

Late July-14 August: 2Q2022 earnings season.

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

August: Sharm El Sheikh will host the African Sumo Championship.

2-4 August (Tuesday-Thursday): First regional climate roundtable, Addis Ababa, Ethiopia.

2 August (Tuesday): The government hosts public consultations on its state ownership policy document with textiles players.

3 August (Wednesday): Deadline for Beltone shareholders to respond to Chimera MTO.

3 August (Wednesday): National Dialogue board of trustees meets to discuss economic agenda.

3 August (Wednesday): OPEC+ meeting.

4 August (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

7 August (Sunday): The government hosts public consultations on its state ownership policy document with pre-K and K12 education players.

9 August (Tuesday): The government hosts public consultations on its state ownership policy document with higher education players.

11 August (Sunday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

14 August (Sunday): Conference of Egyptian entities abroad.

14 August (Sunday): Retail portion of Ghazl El Mahalla IPO ends.

14 August (Sunday): The government hosts public consultations on its state ownership policy document with finance and ins. players.

16 August (Tuesday): The government hosts public consultations on its state ownership policy document with wood manufacturers.

16 August (Tuesday): MNHD’s general assembly meeting to decide whether to allow SODIC to go ahead with due diligence on its takeover bid.

18 August (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

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

23 August (Tuesday): The government hosts public consultations on its state ownership policy document with chemical producers.

25 August (Thursday): Second regional climate roundtable, Bangkok, Thailand.

25 August (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

25-27 August (Thursday-Saturday): Jackson Hole Economic Symposium.

28 August (Sunday): The government hosts public consultations on its state ownership policy document with mining and petroleum refining players.

30 August (Tuesday): The government hosts public consultations on its state ownership policy document with minerals players.

31 August (Wednesday): Late tax payment deadline.

SEPTEMBER

September: Naval Power, Egypt’s first naval defense expo

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

September: Egyptian-German Joint Economic Committee.

September: A delegation from Germany’s Aldi will visit Egypt to look at potential investments.

September: Government to launch an international promotional campaign for Egyptian tourism.

1 September (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

1-2 September (Thursday-Friday): Third regional climate roundtable, Santiago, Chile.

4 September (Sunday): The government hosts public consultations on its state ownership policy document with electricity players.

6 September (Tuesday): The government hosts public consultations on its state ownership policy document with building and construction players.

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

7-9 September (Wednesday-Friday): African Finance Ministers to meet in Cairo to coordinate an African-led position during COP27.

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

8 September (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

11 September (Sunday): The government hosts public consultations on its state ownership policy document with accommodation and food services players.

13 September (Tuesday): The government hosts public consultations on its state ownership policy document with sports industry players.

11-13 September (Tuesday-Thursday): Environment and Development Forum (EDF), InterContinental City Stars, Cairo.

15 September (Thursday): The government hosts public consultations on its state ownership policy document with water and sewage utilities players.

15 September (Thursday): Fourth regional climate roundtable, Beirut, Lebanon.

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

20 September (Tuesday): Fifth regional climate roundtable, Geneva, Switzerland.

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: Air Sphinx, EgyptAir’s low-cost subsidiary to commence operations.

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

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

1 October (Saturday): 2022- 2023 academic year begins for public universities.

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.

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): Autotech auto exhibition, Cairo International Exhibition and Convention Center.

6-18 November (Sunday-Friday): Egypt will host COP27 in Sharm El Sheikh.

7 November (Monday): The inauguration of the first line of the high-speed rail.

7-13 November (Mon-Sun): The International University Sports Federation (FISU) World University Squash Championships, New Giza.

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

DECEMBER

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

13-15 December (Tuesday-Thursday): US-Africa Leaders Summit.

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

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

December: The Sixth of October dry port will begin operations.

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.

7 January (Saturday): Coptic Christmas.

25 January (Wednesday): 25 January revolution anniversary / Police Day.

26 January (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

FEBRUARY 2023

11 February (Saturday): Second semester of 2022-2023 academic year begins for public universities.

MARCH 2023

March: 4Q2022 earnings season.

23 March (Wednesday) — First day of Ramadan (TBC). Maghreb will be at 6:08pm CLT.

APRIL 2023

17 April (Monday): Sham El Nessim.

22 April (Saturday): Eid El Fitr (TBC).

25 April (Tuesday): Sinai Liberation Day.

27 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC).

Late April – 15 May: 1Q2023 earnings season.

MAY 2023

1 May (Monday): Labor Day.

4 May (Thursday) National holiday in observance of Labor Day (TBC).

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

JUNE 2023

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

JULY 2023

18 July (Tuesday): Islamic New Year.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

SEPTEMBER 2023

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

OCTOBER 2023

6 October (Friday): Armed Forces Day.

Late October-14 November: 3Q2023 earnings season.

EVENTS WITH NO SET DATE

2H 2022: The inauguration of the Grand Egyptian Museum.

2H 2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H 2022: The government will have vaccinated 70% of the population.

3Q 2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

3Q 2022: Swvl to close acquisition of Urbvan Mobility.

4Q 2022: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

End of 2022: Decent Life first phase scheduled for completion.

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.

1Q 2023: Adnoc Distribution’s acquisition of 50% of TotalEnergies Egypt to close.

**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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