Thursday, 20 October 2022

AM — Two big conferences next week are the perfect opportunity to talk about our 5-step plan to build a new Egyptian economy

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, wonderful people. We hope the week has been kind to you and that you’re looking forward to a couple of days of downtime as much as we are. But first: We have packed issue on this final workday of the week.

THE BIG STORY here at home this morning: It seems our Qatari neighbors are lining up investments worth as much as USD 2.5 bn in local firms. Word on the street this morning is that Qatar’s sovereign wealth fund is in advanced talks to buy up to 20% of Vodafone Egypt from (large) minority shareholder Telecom Egypt. The QIA is also reportedly kicking the tires on state-held stakes in other, unlisted companies.

ALSO THIS MORNING: We have a look ahead at three conferences that will set the agenda for the business community over the coming month. Two take place next week (below) and this morning’s Going Green looks at what the good people at EBRD expect of COP27. We also have updates on our ambition to become a world-class energy hub, including news that our national electricity grid should be linked up to KSA by mid-2025 and a look at how Turkey may be challenging our bid to become Europe’s natural gas bestie. Throw in some M&A news and the launch of the nation’s first black sand minerals plant and, well … it’s a lot — in the best possible way.

MEANWHILE- There’s still no sign of when we can expect that IMF facility we’ve all been waiting for, though it would be somehow poetic if it were to land on or before Sunday, when the first of the three big conferences kicks off. The IMF executive board’s public agenda shows no meetings scheduled.

HAPPENING NEXT WEEK-

Not one, but two big economic conferences will drive the news agenda for the business community next week.

CONFERENCE #1- The Madbouly government’s highly-anticipated economic conference kicks off on Sunday and runs through Tuesday. The gathering will see government officials, experts, and economists come together with the aim of creating a roadmap for the country’s economic future, Cabinet Spokesperson Nader Saad said in a statement.

The conference has three main tracks: Macroeconomic policies; empowering the private sector and improving the business environment; and formulating a future roadmap for priority sectors.

A technical committee is already looking into some 300 economic proposals for policies and measures to increase the flexibility and competitiveness of the Egyptian economy. They’re being filtered and passed on to the relevant authorities. At the end of the three days, a closing session will be held to draw attention to the conference’s outcomes.

Want to weigh in throughout the conference? Download the app. The Madbouly government has released the economic conference app for Android and iOS to give participants the chance to follow the proceedings and share their input.

CONFERENCE #2- Egypt and the UAE will host a two-day gathering marking 50 years of bilateral ties. The conference takes place Wednesday-Friday (26-28 October) and is being produced in association with the two governments. Day one is an economic forum featuring ministers, senior officials and business leaders from the two countries, while the following day will feature a cultural forum, according to a statement.

WE’RE CONVINCED THERE IS A (RELATIVELY) SIMPLE 5-STEP RECIPE policymakers can follow to turn the economy around by capturing a once-in-a-century chance to turn Egypt into a magnet for FDI and make us into an export powerhouse in the process. Tap or click here to read the story.

What can you do to help?

  • Talk up our recipe if you’re attending either of next week’s conferences;
  • Hit “reply” to this morning’s edition and send us an email and let us know your thoughts. We’re not even close to done talking about this yet.

MORNING MUST-READ

THE LATEST SIGN of how big the chance to capture part of the global supply chain could be for us here in Egypt? Look no further than this morning’s Financial Times, wherein the salmon-colored newspaper worries that the energy crisis in Europe could crush industry on the continent, writing that “executives and politicians fear a wave of deindustrialisation.”

IT’S AS IF EUROPEAN CEOs WERE READING OUR MINDS: “In an effort not to cede ground to competitors, some companies are tapping their lower cost plants outside Europe,” the FT writes. “We are a global company and can leverage assets outside Europe to compensate for any reduction in volume there,” Solvay CEO Ilham Kadri is quoted as saying.

But they’re also making us cry: The story quotes a steel producer as noting that rising natural gas prices in Europe and the continent’s carbon tax means it “makes a lot more sense for us to move production to Asia.” (Again: We haven’t made specific pitches to specific global CEOs — and that means we’re not even part of the conversation on where to move production. We need a private-sector-backed investment promotion agency to take over.)

Which European industry might move off the continent first? Fertilizer makers who use natural gas as feedstock, the paper argues, with producers in Hungary, Croatia, Poland and Romania feeling the squeeze.

There are 35 mn people with manufacturing jobs in Europe. Imagine the economic impact of moving just 10% of that here…

WATCH THIS SPACE- Gov’t will offer land on the cheap to spur industrial investment: While we’re on the topic of boosting FDI and exports, the Madbouly government is working on a package of incentives that includes offering industrial investors land at a more affordable price and with lower downpayments — especially for projects in Upper Egypt and Port Said. Trade and Industry Minister Ahmed Samir told MPs about the idea yesterday. Authorities are also looking at how to make it easier to snag an industrial license and offer more support to export-led businesses, he said.

The takeaway: Expect announcements on the incentives at next week’s conference.


ALSO NEXT WEEK- The House of Representatives will reconvene on Sunday, but expect a lot of empty seats as representatives flock to the economic conference. Those in attendance will discuss a new legislative agenda that includes “economic and social laws,” a source in the know tells us, stopping short of offering more details.

enterprise

COUNTDOWN TO COP (17 days to go)-

Some 150 electric buses are coming to COP, courtesy of GM and Mansour: General Motors (GM) and Al Mansour Automotive signed an MoU with Egypt’s Foreign Ministry to provide 150 EVs to transport COP27 participants around Sharm El Sheikh. The two are COP27’s exclusive mobility partners, they said in a statement (pdf).

It’s your last chance to take our EV survey: Are you an ex-petrolhead shopping around for your first electric vehicle? EV-curious and wondering what all the fuss is about? Or are you not ready to say goodbye to that sweet smell of benzene as you wait at the gas station?

We want to hear from you: We’re taking the pulse on how the nation feels about Egypt’s nascent EV transition. Take a few minutes to fill out our short survey. We’ll be back soon with the results.

No single story is driving the agenda for the global business press this morning. There are several headlines vying for our attention:

  • Russian President Vladimir Putin has declared martial law in annexed parts of Ukraine. (NYT | AP)
  • The US and its western allies want a UN security council meeting over Russia’s alleged use of Iranian drones in Ukraine. (Bloomberg)
  • If you’re into Musk stuff: Tesla’s 3Q earnings (mixed) and CEO Elon Musk’s Twitter takeover (overpriced, in his opinion) get ink in the WSJ and Reuters.
  • Or more of a Murdoch-watcher: The FT has the latest on the media mogul’s real-life Succession story as he vies to put News Corp and Fox back together again.
  • UK politics is still bonkers. The end could be drawing near for PM Liz Truss after Home Secretary Suella Braverman headed for the exit. (AP)

SIGNS OF THE TIMES-

Tougher times for smartphone makers: The global smartphone market just had its worst third quarter in eight years as the economic slowdown hits consumer spending. Smartphone shipments fell 9% y-o-y in the July-September period, continuing a period of slowing sales that has lasted through 2022, according to data research firm Canalys, which is forecasting demand to remain muted for another six to nine months. The slowdown has forced Apple to cut production of the iPhone 14 Plus just weeks before it is due to begin shipping. (Bloomberg | The Information).

There are going to be 8 bn people on our planet by the middle of next month: The world’s population is set to hit 8 bn on 15 November, according to UN forecasts, which also expects India to overtake China as the world’s most populous country next year. But don’t panic: That’s the message coming from the head of the UN Population Fund, Dr Natalia Kanem, who according to the Guardian is cautioning against “population alarmism” which she warns could lead to “ineffective and even dangerous” population controls.

What about us, you ask? Egypt is among eight nations where more than half of the projected increase in the world’s population up to 2050 will be concentrated. The UN expects the global population to hit 9.7 bn by the middle of the century, rising by 1.7 bn over the next 27 years. Egypt’s population has now surpassed 104 mn, rising by more than 1 mn this year alone, and is expected to near 160 mn by 2050.

WEEKEND MUST READS-

How should a business bro dress? As more and more “finance bros” return to their “native habitat” (ie: as bosses end WFH), men are “trading hoodies at the home office for hard pants,” the New York Times reports.

How many more warning signs does Mark Zuckerberg need to see before he pulls the plug on his metaverse? Business Insider argues that Meta has poured USD bns into Zuck’s pet project with little to show for it.

Could a UK-style market blowout happen in the United States? That’s the tn-USD question keeping Wall Street and US government officials alike awake at night. (New York Times)

CIRCLE YOUR CALENDAR-

The Suez Canal Economic Zone (SCZone) will launch a promotional campaign ahead of COP27 on potential investments in the zone next week. The campaign will be launched domestically on Sunday, 23 October, before the international campaign kicks off on Monday, 24 October.

Fuel prices to rise this month? We’re expecting the government to hike fuel prices for the seventh consecutive quarter when the fuel pricing committee meets this month. Fuel prices have risen by as much as 28% over the past 18 months in response to heightened international oil prices, which surged earlier this year on the back of Russia’s invasion of Ukraine.

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

enterprise

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: We sit down with Khalid Hamza, head of Egypt at the European Bank for Reconstruction and Development (EBRD), to find out what the multilateral lender has in store for COP27.

enterprise

2CELLOS — LIVE AT SOMABAY on 18 November, 2022: Mark your calendars — world-renowned and wildly popular cellist duo, 2CELLOS will be performing at Somabay on 18 November, 2022. Having racked up a bn-plus audio streams, countless sold-out concerts, and mns of fans across the globe in their 10 years together as 2CELLOS, the Croatian duo of Luka Šulić and HAUSER will be visiting Egypt in their long-awaited 2022 Dedicated World Tour. Book your ticket now: https://www.ticketsmarche.com/tickets/buy-tickets-2-cellos.html. Call us 16390.

M&A WATCH

Qatar could soon invest up to USD 2.5 bn in state-held firms

Qatar could invest as much as USD 2.5 bn in state-held firms: Qatar’s sovereign wealth fund is in advanced talks to buy up 20% of Vodafone Egypt from minority shareholder Telecom Egypt, as well as other state-held stakes in unlisted companies, in transactions worth up to USD 2.5 bn, sources close to the matter told Bloomberg. The sources did not disclose the other state-held firms Qatar is eyeing.

Telecom Egypt hasn’t received a formal offer from anyone yet: TE is in talks with three Arab sovereign funds to divest part of its stake in Vodafone Egypt, though the telecoms giant has yet to receive any official bids, a source close to the matter confirmed to Enterprise. We’ve previously reported that the Qatar Investment Authority (QIA), Saudi Arabia’s Public Investment Fund, and Abu Dhabi’s ADQ are all in talks with the government over a piece of Vodafone Egypt.

What’s the timeline on the Vodafone Egypt stake sale? TE could come to an agreement with one of the funds by the end of the year, our source confirmed.

We knew this was coming: The three funds have been in talks with the government — which owns 80% of TE — over the Vodafone stake for the past few months. Bloomberg Asharq reported previously that QIA is looking to acquire as much as 25% of the company, while our source tells us TE is open to selling up to a 20% stake in Vodafone Egypt “at the right price that would bring maximum returns to shareholders.” The EGX-listed telecoms giant holds a 45% stake in the company.

QIA has reportedly been eyeing several Egyptian companies: The fund was rumored to be looking at the EGX as an entry point to deploy capital as part of moves by our neighbors in the region to help shore up our economy with an influx of FDI. Local media outlets have reported that the Qatari fund is interested in purchasing stakes in Alexandria Containers and Eastern Company — though a source at Eastern’s majority shareholder, Chemical Industries Holding, denied knowledge of the talks when we reached out recently. The fund’s investment arm last month signed an MoU with the Transport Ministry to explore investment in Egypt’s container terminals.

Background: Qatar earlier this year pledged to invest as much as USD 5 bn in Egyptian companies as part of wider Gulf efforts to shore up our economy and provide us with vital FX. Both PIF and ADQ have already made their to the EGX, investing bns of USD in a number of locally listed companies this year. PIF is reportedly still eyeing stakes in at least three high profile local firms. Gulf state neighbors have pledged over USD 22 bn in total to support the economy amid the fallout from the crisis in Ukraine.

This all comes as part of the government’s privatization push, which should see it more than double the private sector’s role in the economy to 65% over the next three years and attract USD 40 bn in investment by 2026.

M&A WATCH

valU acquires an undisclosed minority stake in payments app Kiwe

EFG Hermes’ BNPL platform, valU, has acquired an undisclosed minority stake in fintech Kiwe, Kiwe CEO Fatma Ibrahim confirmed to Enterprise, following a company press release (pdf). The e-payments startup counts our friends at EFG Hermes Finance, EFG EV Fintech, dFin Holding, and Marakez among its existing shareholders.

What they said: “Through the acquisition Kiwe can offer our users an enhanced service by paying in installments while expanding our service to people who are unbanked or underbanked, and leverage valU’s network beyond Cairo and Giza,” Ibrahim tells us. “ValU will also be able to leverage our younger segment and enhance the overall payment experience,” she added.

About Kiwe: Kiwe's fintech solutions provide small companies and startups (mostly youth-led small businesses) with a cost-effective digital payment platform that makes it simple for them to carry out transactions electronically. The e-payment app closed its first, undisclosed investment round last year.

Another strategic move for valU: valU is continuing its expansion of fintech services, following on its recent acquisition of Paynas, an employee management and benefits company.

enterprise

ENERGY

Egypt-Saudi electricity interconnection finally has a timeline

Our 3 GW electricity linkup with Saudi is going live in mid-2025: Trial operations for the USD 1.8 bn Egypt-Saudi electricity interconnection are set to begin in May 2025 with an official operational launch set for later in the same year, Bloomberg Asharq quotes Egyptian Electricity Transmission Company (EETC) head Sabah Mashaly as saying. The first 1.5 GW phase will go live in June 2025, followed by the second and final 1.5 GW phase in November 2025.

The funding is in place: Egypt has already secured USD 600 mn from several undisclosed Arab funds and agencies, Mashaly told Bloomberg Asharq. Standard Chartered Bank and Sumitomo Mitsui Banking Corporation this week announced the provision of USD 566.4 mn for the Saudi Electricity Company to facilitate the project.

We’ve been waiting on a clear timeline for the project’s operation for some time now: A consortium of Orascom Construction (OC) and Japan’s Hitachi ABB Power Grids was awarded the project’s execution contracts by the EETC last October. The project had reportedly been on hold since at least 2018, when initial tenders were launched, primarily due to the Saudi government’s work on Neom City.

About the project: The Egypt-Saudi electricity interconnection project will be home to HVDC conversion stations. Those include two stations in Saudi Arabia’s Medina and Tabuk and another in Badr city, east of Cairo. It will flow power along a 1.35k km route through overhead power lines and a 22 km subsea cable in the Red Sea.

Prospects for electricity exports to third-party countries? A surplus in generated capacity between the two countries could be exported to nearby countries through other interconnection projects, Sabah said.

REMEMBER- We’ve built a large surplus of electricity generation capacity over the past few years. Our grid is currently linked with Jordan, Palestine, Libya, and most recently Sudan. We’re also looking to create energy trade relationships with Greece and other regional neighbors, including a potential gas pipeline and the 2 GW EuroAfrica Interconnector project to connect our grid with Greece and Cyprus, which is expected to begin commissioning this December.

ENERGY

We’ve got competition to become Europe’s new best friend on gas

Russia may reroute gas to Turkey: Russian and Turkish energy authorities will begin work on a Moscow proposal to export Russian gas to Turkey for re-export to Europe, Turkish President Recep Tayyip Erdogan said last week, according to the Associated Press. Russia is proposing to pump the gas via the TurkStream pipeline beneath the Black Sea as it no longer considers the Nord Stream pipelines to Germany “reliable” conduits, Turkey’s foreign minister said.

How likely is this? Any proposal would need to be examined to see whether there is a European market appetite for such a project, Turkey’s foreign minister said. That’s a likely nod toward the fact that Russia is the last country most of Europe wants to be sourcing its energy needs from these days.

REMEMBER– We’re also angling for regional energy supply: Egypt already signed a nine-year MoU with Israel earlier this year to increase gas exports to Europe via Egypt’s LNG facilities. European energy companies will also increase their investment in gas exploration and production in Egypt and Israel, as part of the agreement.

Europe really needs more LNG terminals: More than 35 liquified natural gas (LNG) laden vessels are unable to offload their cargo due to Spain’s gas terminals operating at maximum capacity, Reuters reports. The country is offering just six slots this week, leaving dozens of vessels floating off the Spanish coast. Gas grid operator Enagas declared an “exceptional operational situation” on Monday and said it might have to turn away shipments even as Europe faces an historic energy shortage due to the loss of Russian gas.

STARTUP WATCH

Trella secures USD 6 mn in venture debt backed by the US gov’t

The good people at B2B logistics marketplace Trella have secured USD 6 mn in debt financing from global debt platform ALMA Sustainable Finance and the US government’s US International Development Finance Corporation (DFC), according to a press release. ALMA got a USD 4.2 mn guarantee facility from DFC, allowing it to lend the USD 6 mn to Trella, according to the statement.

SOUND SMART- Otherwise known as “venture debt,” debt financing typically combines the traditional features of a loan with some aspects of VC financing. We answer all your questions in our recent explainer.

Pakistan + Egypt focus: Trella will use the financing to help it expand in those two markets. The agreement will also see USAID offer technical assistance to Trella on its Egyptian and Pakistani operations. The company currently operates in Egypt, Pakistan, Saudi Arabia and the UAE.

What they said: “We need new sources of capital to maintain our high-growth trajectory and reach the thousands of truckers across the region who need support to access more shipments, faster payments, and other integral services,” said Trella CEO and co-founder Omar Hagrass (LinkedIn | Making It).

Trella is on a financing push: The startup last month inked an agreement with Contact Financial designed to give it and the carriers it works with the access to finance they need to grow. Trella closed one of Egypt’s largest-ever series A rounds last year, raising USD 42 mn in a round co-led by Maersk’s VC arm. The company said at the time that the money would be used to expand in the MENAP region and develop its platform.

KUDOS

Gouna’s Uri-Schule opens first building + HSBC’s advisory arm gets tub tubs

Swiss education lands in Gouna: Naguib and Samih Sawiris last week inaugurated the first building of the Uri-Schule El Gouna campus, alongside Swiss Ambassador to Egypt Yvonne Baumman and principal Lucas Aeschbacher. The Swiss school is the first in MENA and Africa to be directly supervised by Swiss authorities and follows an adapted version of the Swiss curriculum, with plans to also introduce IB and the European Matura. It is directly supervised by the Swiss canton of Uri.

IFLR MENA awards 2022: Our friends at HSBC landed the International Financial Law Review’s (IFLR) in-house team of the year award for its investment banking team, marking the second consecutive year they’ve received the award. Helmy Hamza & Partners was named Egypt’s national law firm of the year, while Adsero-Ragy Soliman & Partners took home the rising star firm of the year in the MENA region award.

Hydroponics equipment supplier Plug’n’Grow is one of seven startups selected to participate in Green for Growth Fund’s Clim@ Scaler accelerator in partnership with European VC Rockstart, the startup said in a statement (pdf). The four-month program could help provide the startup with access to investors, corporate partnerships and funding, the statement said.

Global Medical City (GMC) has launched a women’s health center dedicated to diagnosing and treating breast cancer, it said in a statement (pdf) this week. GMC is offering oncology consultations at no charge and special pricing on breast examinations during October to coincide with breast cancer awareness month.

enterprise

LAST NIGHT’S TALK SHOWS

Last Night’s Talk Shows: Our first black sand plant

All eyes were on the Hassan Allam-built black sand plant last night. The talking heads gave most of their attention to the inauguration of the black sand plant near Burullus in Kafr El Sheikh. President Abdel Fattah El Sisi was present for the opening.

Our friends at Hassan Allam Construction carried out the engineering and construction and contributed to the design of the plant, which the company built in a record 12 months, according to a statement (pdf) from the company. Hassan Allam landed the contract for the project from the military-affiliated National Service Products Organization’s Egyptian Black Sand Company back in 2020.

WHY IT MATTERS- Black sand has major export value “because it is of wide use in different strategic technologies like semiconductors, nuclear radiation material, vehicle frames, pharma, electronics, paints, and oil pipelines,” head of the House's Industrial Committee Moataz Mahmoud told reporters yesterday. Hassan Allam Holding CEO Hassan Allam noted that the project would both cover domestic needs and open doors to export sales.

How it works: The plant’s floating concentration station mines and dredges beach sand for ore, which is then transported for separation into rare minerals zircon, magnetite, ilmenite, rutile, garnet, and monazite.

SOUND SMART- Black sand is not sand at all — it’s an accumulation of heavy minerals, many of which have applications in industries from steel to paint, ceramics, textiles, paper, plastics, food, and renewable energy. It also looks really cool.

Our black sand reserves could last us some 200 years, Nuclear Power Plants Authority chief Hamed Mira told Ala Mas’ouleety (watch, runtime: 21:56), adding that some of the minerals to be extracted can sell for up to USD 3.2k a ton. The project will also play a part in the development of the Kafr El Sheikh city of Baltim and rid Egyptian coasts of harmful minerals, Mira said.

President El Sisi called on investors to amp up their involvement in black sand projects, either alone or through private-public partnerships, according to Masaa DMC (watch, runtime: 4:38). The country might need up to four more black sand plants, Masaa DMC’s Ramy Radwan said. Opening up more plants will create jobs and tap the state’s natural resources, Senate member Mahmoud Al Kott told Al Hayah Al Youm (watch, runtime: 9:05).

EGYPT IN THE NEWS

There’s not much being said about us in the international press this morning. The National profiles Downtown Cairo gallery Contemporary Image Collective’s ongoing exhibition on the experiences of Egyptian expats in the Gulf.

ALSO ON OUR RADAR

Tax holiday for the builders of our first nuclear plant

Dabaa contractors set to get a big tax break: The House of Representatives’ Energy and Environment Committee yesterday approved in principle draft amendments to the law regulating the Nuclear Power Plants Authority (NPPA), which would fully exempt from taxes all parties involved in building and operating nuclear projects. The legislation — which would include contractors, sub-contractors, equipment suppliers, and workers — comes to speed up the implementation of Rosatom-built Dabaa, the country’s first nuclear plant. It would also rename the NPPA as the Nuclear Power and Renewable Energy Plants Authority (NPREPA).

REMEMBER- Russian state nuclear company Rosatom was contracted in 2015 to handle the construction and provide fuel for the c. USD 30 bn plant, which will feature four 1.2-GW reactors. Construction began this summer and is slated to conclude at the start of the next decade. South Korea’s state nuclear power company in August signed a KRW 3 tn (USD 2.2 bn) contract with Rosatom to supply equipment and help build the 4.8 GW plant.

MEANWHILE- E-commerce platform Noon will launch a dedicated section on its website for the sale of products from electronics retailer BTECH per a signed MoU. (Statement, pdf)

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

  • Saleh, Barsoum & Abdel Aziz will no longer represent Deloitte in Egypt from December and will instead join Grant Thornton International Ltd. as its local member firm. (Statement,pdf)
  • UAE-based El Gammal Industrial Systems will reportedly invest EGP 100 mn to set up an aluminum-parts factory in Ain Sokhna. (Al Mal)
  • Emirati foodtech startup Grubtech will provide its services to the Egyptian Food Bank after signing a partnership agreement with the nonprofit organization. (Statement, pdf)
  • The government is preparing to offer a number of land plots and housing units in new cities to Egyptians living abroad. (Statement)

PLANET FINANCE

Powered by
EFG Hermes - https://efghermes.com/

Zero signs the fed is going to slow down on rate hikes: A fourth consecutive 75-basis-point interest rate hike is all but guaranteed when the Federal Reserve meets in November for its penultimate policy meeting of 2022 as officials worry about sticky inflation, the New York Times reports. Officials had expected to discuss slowing the rapid pace of rate hikes next month but hotter-than-expected inflation data and strong employment figures in September mean that they’ll likely have to maintain their hawkish stance for longer and raise rates higher than previously forecast.

The ECB will likely follow suit: One official at the European Central Bank is advocating the bank to hike interest rates by 75 bps at both of its upcoming meetings in October and December, according to Bloomberg.

ALSO IN PLANET FINANCE-

  • UK inflation resumes its rise: UK inflation hit 10.1% in September, returning to the 40-year-highs seen in July after a slight dip in August. (ONS)
  • Another country is planning a national digital currency: India’s central bank is moving forward with plans for a digital INR and will conduct “limited pilot launches” over the next six months. (Nikkie Asia)
  • Meta is about to be GIF-less: Meta will comply with an antitrust order from a UK watchdog to sell GIF library Giphy. (The Verge | Statement)
  • DEWA slips below IPO price: Shares in Dubai main utilities firm DEWA dipped below their debut price of AED 2.48 yesterday for the first time since its blockbuster IPO six months ago. (Bloomberg)

Down

EGX30

10,156

-0.1% (YTD: -15.0%)

None

USD (CBE)

Buy 19.62

Sell 19.73

None

USD at CIB

Buy 19.65

Sell 19.71

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

11,795

-0.1% (YTD: +4.6%)

Down

ADX

10,067

-0.2% (YTD: +18.6%)

Down

DFM

3,389

-0.6% (YTD: +6.0%)

Down

S&P 500

3,695

-0.7% (YTD: -22.5%)

Down

FTSE 100

6,925

-0.2% (YTD: -6.2%)

Up

Euro Stoxx 50

3,471

+0.2% (YTD: -19.2%)

Up

Brent crude

USD 92.41

+2.6%

Up

Natural gas (Nymex)

USD 5.48

+0.3%

Down

Gold

USD 1,631.70

-0.2%

Down

BTC

USD 19,119

-1.1% (YTD: -58.6%)

THE CLOSING BELL-

The EGX30 fell 0.1% at yesterday’s close on turnover of EGP 1.26 bn (20.8% above the 90-day average). Foreign investors were net sellers. The index is down 15.0% YTD.

In the green: Telecom Egypt (+4.4%), Mopco (+2.1%) and Egypt Kuwait Holding-EGP (+1.1%).

In the red: e-Finance (-2.6%), GB Auto (-2.3%) and Heliopolis Housing (-1.9%).

Asian markets are down in early trading this morning and futures suggest both European markets and Wall Street — barring the Dow Jones — will also open in the red later on today.

greenEconomy

An interview with Khalid Hamza, head of Egypt at the EBRD: Multilateral development banks like the European Bank for Reconstruction and Development (EBRD) play a key role in mobilizing climate finance for the private- and public sectors, and providing crucial assessment and consultancy services to government institutions. As it prepares to host COP27 in just a few weeks, Egypt is placing strong emphasis on the role of financial innovation to help developing countries mitigate and adapt to the effects of climate change. As COP27 nears, we spoke with the EBRD’s Egypt head, Khalid Hamza, about the lender’s role at the conference and the opportunities for climate investment in Egypt.

Below are edited excerpts of our conversation:

ENTERPRISE: Tell us what EBRD has in store for COP27.

KHALID HAMZA: EBRD is taking the lead on the energy component of the Nexus of Water, Food and Energy (NWFE) program, which will be unveiled at COP27. This USD 10 bn program aims to help Egypt decarbonize its electricity grid by decommissioning 5GW of conventional energy from carbon-based plants and replacing it with 10GW of renewable energy.

The bank is supporting concessional and grant fundraising enabling a smooth transition to renewable energy on the national grid, thereby allowing for larger private sector involvement in the renewable energy industry.

E: The bank said last month that it could provide as much as USD 1.3 bn to support clean energy projects in Egypt. Is this tied into NWFE?

KH: Yes, the EBRD is looking to begin investments under the program by next year. USD 300 mn of the USD 1.3 bn will go toward concessional or IFI financing to support the grid and the remaining USD 1 bn will go towards the private sector for supporting the 10 GW of renewable energy. We’ll do this either through loans or equity depending on the project structure itself, whether it is a private deal or a government tender.

E: What else can we look forward to?

KH: EBRD has been participating in the Green Cities program, which includes Cairo, Alexandria, and Sixth of October. We identify and prioritize the environmental challenges cities face then identify the type projects that would reduce those challenges. We gather this information into a document which can then be shared as a guide and resource for future investments and green projects the government can potentially include bond offerings. During COP27, we’ll showcase some of what we’ve been working on in an event.

We have also helped Egypt develop a low-carbon pathway for the cement industry, the fertilizer industry, and the oil and gas sector — looking at the necessary investments and policies required to be able to bring that particular sector down to net zero in detail. I believe the roadmap for the cement industry will be showcased during COP27.

Finally, we have been involved in Egypt’s hydrogen strategy by providing consultants and more will be revealed during COP27 on Energy Day. We hope the unveiling of the strategy will spur some of the interests that have already been put in place through the 14 MoUs that have been signed so far into a more concrete step towards actual projects.

E: What outcomes is the bank hoping to see from this year's conference?

KH: The year’s edition has been dubbed the COP of implementation. What we’re hoping to see is Egypt presenting a good model for implementing a decarbonization plan that can be applied across the world.

E: Climate financing — especially for developing nations — is expected to be a major talking point for the summit. How will EBRD contribute to this dialogue at COP27?

KH: We see our role as a catalyst. We would not necessarily be taking on a lionshare of the investments in the coming years, but our role can be more in the vein of removing roadblocks preventing the private sector from coming in and participating in investment.

The tns that are needed to address climate change worldwide are not going to come from government budgets or philanthropy, they’ll come from the private sector. To that end the EBRD will be unveiling a new awareness chapter we’ve been working on during COP27 which basically creates the necessary awareness for industries within the private sector regarding green aspects of business and how environmental risks can damage your company, how green investments open up new markets and opportunities for job creation.

Oftentimes there is a supply and demand mismatch in terms of securing financing. There are not enough projects which have been structured in a proper way in order to access the financing available. We have been able to come in and help projects accomplish this.

E: What about green bonds?

KH: The challenge with green bonds is that the burden of reporting is more extensive to satisfy bondholders and reassure them that the bonds are fulfilling what they set out to do. They’re not necessarily more expensive, but they are more cumbersome because you have to set up these new processes and reporting systems for shareholders.

However, what we’re seeing is there will be decreasingly less investments and financing appetite for non-green bonds. Projects will find it difficult to secure enough funding if they aren’t focused on ensuring their projects are green or have a green element considered.

E: What could climate investment mean for Egypt?

KH: If Egypt jumps on the train, it has a very good opportunity to become one of the industrial producing hubs of the world due to cheap energy and a close proximity to Europe. It has one of the world's best renewable reserves with good wind and extremely good sunlight with the right level of radiation to produce huge amounts of electricity across a massive land area, and can produce renewables very cheaply allowing a huge portion of the manufacturing chain to become green.

This will naturally attract industry to the country with carbon taxation coming into place, it will be more and more difficult to access global markets without being able to ensure or prove that you have a low carbon intensity supply chain creating the products.

Your top green economy stories for the week:

  • The government’s Decent Life initiative will work to raise awareness of environmental issues among beneficiaries in partnership with the Environment Ministry.
  • Qalaa Holdings subsidiary TAQA Arabia has launched the largest solar power plant to date in Sharm El Sheikh, set to supply 30% of the power load in Nabq.
  • Egypt’s Smart Green Governorates initiative will announce its 60-project shortlist at a conference early November.
  • The Environment Ministry and the Centre for Environment and Development for the Arab Region and Europe (CEDARE) launched an EU-funded training program for green entrepreneurs. (Ahram Gate)

CALENDAR

OCTOBER

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

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

23-25 ​​October (Sunday-Tuesday): Egypt economic conference, Cairo, Egypt.

24 October (Monday): Empowering Sustainable Trade Flows with Factoring conference, St. Regis Cairo.

26-28 October (Wednesday-Friday): Egypt celebrates 50 years of ties with the UAE.

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

27-30 October (Thursday-Sunday): Cairo ICT, Egypt International Exhibition Center, New Cairo.

30 October-1 November (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center (EIEC), New Cairo.

Late October-14 November: 3Q2022 earnings season.

Late October: First Abu Dhabi Bank to complete full integration with Bank Audi’s Egyptian operations after merger.

NOVEMBER

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

1-2 November (Tuesday-Wednesday): Arab League annual summit, Algiers, Algeria.

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.

9 November (Wednesday): Finance Ministry to host “Finance Day” at COP27.

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.

27 – 28 November (Thursday-Friday): The first edition of the Egypt Media Forum.

DECEMBER

3 December (Saturday): Dior Men’s pre-fall collection show in Giza.

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.

December: Egyptian Automotive Summit.

December: Egypt to expand Sudan electricity link capacity to 300 MW.

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.

1 January (Sunday): Use of Nafeza becomes compulsory for air freight.

1 January (Sunday): Residential electricity bills are set to rise as per the government’s six-year roadmap (pdf) to restructure electricity prices by 2025.

7 January (Saturday): Coptic Christmas.

24 January-6 February: The 54th Cairo International Book Fair, Egypt International Exhibition Center

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

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

30 January-1 February (Monday-Wednesday): CI Capital’s Annual MENA Investor Conference 2023, Cairo, Egypt.

FEBRUARY 2023

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

13-15 February (Monday-Wednesday): The Egypt Petroleum Show (Egyps), Egypt International Exhibition Center, Cairo.

23-27 February (Thursday-Monday): The eighth annual Business Women of Egypt’s Women for Success conference.

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

19-21 June (Monday-Wednesday) Egypt Infrastructure and Water Expo debuts at the Egypt International Exhibition Center.

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.

4Q 2022: Electricity Ministry to tender six solar projects in Aswan Governorate.

4Q2022: Raya Holding subsidiary Aman and Qalaa Holdings’ Taqa Arabia to launch their fintech company.

4Q 2022: Saudi Jamjoom Pharma to inaugurate its EGP 1 bn pharma factory in El Obour.

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.