Sunday, 27 November 2022

AM — Is QIA in talks to develop and manage Safaga port?



Good morning, friends, and welcome to what we think is going to be a very busy week for the business community and policymakers alike as the sprint to the year-end holiday season begins.

As we all look ahead to 2023, we’re more convinced than ever that FDI and exports need to be at the heart of our nation’s economic growth strategy. A little over a month ago, we published a five-step recipe that has the power to transform Egypt into a major global export hub by integrating us with the supply chains of major industries and selling into a once-in-a-lifetime energy opportunity. Doing so will also turn us into a magnet for foreign direct investment — not hot money that leaves the moment it smells risk or an extra 50 bps of return, but long-term capital that creates jobs and brings with it global know-how.

We then held an invite-only breakfast for 20 top CEOs to talk through our plan — and to a person, they believe it is the way forward. Why? Because it is both focused and commonsense:

  • Set an audacious long-term goal — USD 50 bn worth of FDI in the 12 months ending June 2033.
  • Choose five champion industries. Ultimately, it may have to be more: Five with potential today, five with potential a decade from now. But the point is that it is focused and unchanging.
  • Make it really, really easy to do business in Egypt. Digitize everything and accept no excuses.
  • Build an independent investment promotion agency like the one that has been so incredibly successful in India.
  • Stay focused: Back the plan, the champion industries, and the agency for the long term — no matter who whines.

This morning, we’re kicking off a series that will run through December. In this CEO poll on FDI and exports, we asked each top exec two simple questions: If you could pick just one champion industry, what would it be? And why do you think FDI and exports are the way forward?

SPEAKING TODAY: GSK General Manager Mohamed El Dababy, at the head of our news well, below.

WE’RE NOT THE ONLY ONES WITH FDI ON THE BRAIN- The Senate is back in session today and its financial and economic affairs committee will discuss a report by the pro-government Mostaqbal Watan party that aims to overhaul how we approach FDI. The 190-page report focuses on ways to attract more FDI to six key industries, including agriculture, construction, industry, tourism, transport and oil and natural gas. We’re not saying we necessarily agree with the full list, but the key here, friends, is that it is focused.


MEANWHILE- We’re in the countdown stage for the Enterprise Climate X Forum with just nine days to go before we meet with some of you in Cairo at the Grand Egyptian Museum on Tuesday, 6 December 2022. Invitations are out, and judging by the emails we’ve gotten, it sounds like some of you’re as excited as we are.

*** YOU MUST REGISTER TO ATTEND by clicking the link on your registration email. Attendance is by invitation only and your invite is personalized. You will require a special QR code to gain access to the GEM on event day — we’ll be sending them out at the end of the week.

Have you not received an invitation? If you’re a C-suite exec, business owner, climate professional, DFI staff, investor, or senior banker, please email us at to signal your interest, letting us know your name, title, and where you work. You can learn more on our conference website here.

The agenda: We get underway with a networking breakfast at 8am CLT. Then we jump right in with live interviews and panels made up of CEOs, execs, bankers, and development finance folks, who will mull over a variety of topics, including:

  • Is there truly a business case for green hydrogen in Egypt?
  • What policies, regulation and legislation should the government be looking at to drive investment in the green economy?
  • Practical advice from industry insiders on how to get your climate-focused business started.
  • How do we finance our green transition?
  • How startups and VCs are embracing the green economy.


The Egyptian Mercantile Exchange (EMX) goes live today. Egypt has registered 40 mills ahead of the commodity exchange going live today, Ibrahim Ashmawy, the head of the Supply MInistry’s Internal Trade Development Authority (ITDA), told Reuters. Wheat specifications and quantities that would be traded will be made public immediately before first trades. Ashmawy said that oil, sugar and rice trading under the EMX would follow later.

Russian wheat will be traded on the exchange today, Ashmawy, who is also chairman of the EMX, told Ala Mas’ouleety (watch, runtime: 5:09). State grains buyer GASC will sell the wheat to private mills in an auction lasting from 2pm until 4pm CLT he said, with contracts awarded to bidders at 5pm. Big ambitions: The EMX could be the biggest commodities exchange in the region within a year or two, Ashmawy added, (watch, runtime: 3:06).

Speaking of commodities: Rice producers, sellers and distributors now have until Sunday, 4 December to notify the Supply Ministry of what they’ve stockpiled and where they’re keeping it, according to a statement by the Supply Ministry. Rice has been designated as a “strategic commodity” for at least three months under efforts to deter traders who try to exploit the opportunity to hoard rice amid a global shortage of commodities. The 4 December deadline is a one-week extension.

ALSO- The Senate is back from a two-week recess and is expected to discuss legislation aimed at accelerating the reconciliation process for illegal buildings. The bill, which is designed to make it easier for owners of unlicensed buildings to go legit, is expected to get a signoff by Senators.

In the House of Representatives, the Economic Committee will reopen debate today of amendments to the Competition Act. Today’s session comes just days after Mahmoud Momtaz, the head of the Egyptian Competition Authority (ECA), answered questions from the committee on whether legislation needs to be amended to improve competitive neutrality.

WHY IT MATTERS- Amendments to the existing law, which have been up in the air since last year, would among other things give the ECA more power to regulate M&A. The House discussed the amendments extensively with members of the business and legal communities during the last legislative session, but failed to reach common ground on a handful of contentious articles.


#1: Egypt will announce its green hydrogen strategy by the end of the year, Electricity Minister Mohamed Shaker said. Shaker reviewed with PM Moustafa Madbouly the long list of new renewable energy and green hydrogen agreements inked at COP27, which together could bring up to USD 119 bn in fresh investment. We had been expecting the hydrogen strategy to be unveiled at COP.

#2: More grist for the PIF-Egyptalum rumor mill: EGX-listed Egypt Aluminum (EgyptAlum) could appoint an independent financial advisor to determine its fair value ahead of a potential acquisition by Saudi Arabia’s sovereign wealth fund, Al Borsa reports, citing sources it says are in the know. The fair value study could be finalized within weeks, with an approval by the Financial Regulatory Authority on the acquisition by Saudi Arabia’s Public Investment Fund (PIF) expected before the end of the year, the sources are cited as saying.

BACKGROUND- Local media has previously reported that the PIF is looking to take a position in EgyptAlum’s capital increase, which is set to help finance a USD 300 mn overhaul of the company. Then-public enterprises minister Hisham Tawfik said in May that the state could sell a 20-25% stake in the company to an unnamed Arab sovereign fund.

#3- EGX boss Ramy El Dokany said the program to offer stakes in state-owned firms should be “activated quickly” to take advantage of improving conditions on the EGX, according to a Finance Ministry statement. El Dokany made the comment in a meeting with Finance Minister Mohamed Maait and officials from the Muscat stock exchange to drum up Omani investment. The EGX30 is now up 7.0% year-to-date in the wake of the float of the EGP.

#4- The company running the new New Administrative Capital could float units on the EGX, Chairman Khalid Abbass said. The company is looking to get more Gulf real estate developers to invest in the new capital and it has plans to start selling plots for phase two of the city by 2H 2023, Abbass added.

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It’s day eight of the World Cup: Teams in Group E and F face off today (all times CLT):

  • Japan v Costa Rica (12pm)
  • Belgium v Morocco (3pm)
  • Croatia v Canada (6pm)
  • Spain v Germany (9pm)

France is through to knockouts, and it’s goodbye to Qatar. Defending champion France became the first to reach the FIFA World Cup knockout stage on Saturday, sealing a 2-1 victory against Denmark thanks to a late goal from the magnificent Kylian Mbappe. Host Qatar will be the first team to bid farewell to the tournament after losing 1-3 to Senegal on Friday in a second straight defeat. The host country plays one more match on Tuesday, taking on the Netherlands.

Elsewhere, Lionel Messi saved Argentina’s World Cup dream yesterday, helping secure a 2-0 victory against Mexico. Poland now leads Group C with 4 points, after beating Saudi Arabia 2-0 yesterday despite a notable performance by the Saudis. Tunisia lost 0-1 against Australia yesterday in Group D, putting its chances to qualify in jeopardy. The Tunisian team will have to beat France to have any chance of qualifying to the knockout stages.

World Cup drama spills off the pitch and onto the business pages: Qatar is reportedly “reviewing their current and future investments” in London, after the city’s public transport authority banned adverts by the Gulf country amid criticism of its human rights record, the Financial Times reports. Qatar is “considering investment opportunities in other UK cities and home nations” after taking the ban as “a message from the mayor’s office that Qatari business is not welcome in London,” the FT quotes a Qatari source as saying.

No plans after Qatar? Come pay us a visit. The Tourism Ministry has launched a promotional campaign letting holders of the Hayya card — Qatar’s entry permit for World Cup attendees — know that they can use the card to enter Egypt and get offers on tourist activities (watch, runtime: 0:15.)


Payment and fintech conference Pafix will be held as part of Cairo ICT 2022 from today until Wednesday at the Egypt International Exhibition Centre in New Cairo.

The US and Russia will hold nuclear talks in Cairo this week: Washington and Moscow will discuss resuming mutual nuclear inspections during week-long talks from Tuesday, 29 November through to 6 December, Russian Deputy Foreign Minister Sergei Ryabkov said, according to CNN.


*** It’s What’s Next day: We have our weekly deep-dive into what makes and shapes pre-listed companies and startups in Egypt, the UAE and KSA, touching on investment trends, future sector insights and growth journeys.


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Why GSK’s Mohamed El Dababy thinks exports and FDI are the way forward

We recently had breakfast with 20 top CEOs to talk about why exports and FDI are key to our economy going forward. After reading our five-step recipe for turning Egypt into a global export hub and FDI magnet, participating CEO has agreed to answer to two questions on the record.

Mohamed El Dababy (LinkedIn) is general manager of pharma giant GSK in Egypt. An industry veteran, he has worked in Egypt, the United Arab Emirates, Saudi Arabia, Germany, and Denmark with global names. He has had responsibility for national, regional and global files at names including Boehringer Ingelheim and Novo Nordisk. He returned to Egypt to become country chief for GSK in late 2021.

ENTERPRISE- Which industry would you put on a focused short list — and why?

MOHAMED EL DABABY- In a word: Tourism. It is the only quick fix we have to increase our hard currency inflows, we have whatever it takes to quickly make an economic difference. Other economic reforms, such as increasing FDI, improving the ease of doing business, etc. will pay off (hopefully) in the medium/long term.

E: Why are exports and FDI the way forward?

MD- Exports are a consequence of surplus of supply after the fulfillment of local demand, and Egyptian producers are struggling to meet local demand due to the hard currency crunch. We have to make sure first that local industries are in good health and enabled for expansion to export.

I couldn't agree more that exports are critically important for us to improve the trade balance. In my opinion, it is the only sustainable way for the economy to flourish as other sources of hard currency inflow have a growth ceiling — particularly sources such as remittances and the Suez Canal.

Foreign direct investment will follow once we have local successful Egyptian industries that have strong export arms.


Has Qatar chosen Safaga port?

Qatar’s sovereign fund wants the port of Safaga: The Qatar Investment Authority (QIA) is reportedly in talks with the Madbouly government to develop and manage the port of Safaga under a 25-year contract, Bloomberg Asharq quotes two unidentified sources as saying. If the transaction is completed, it would mark Qatar's first entry into Egypt’s ports sector.

The Qataris have been eyeing our ports: Representatives from Maha Capital, the investment arm of QIA, visited Damietta port last month after signing an MoU with the Transport Ministry in September to explore investment in Egyptian container terminals. The Sovereign Fund of Egypt (SFE) and the QIA inked an agreement to cooperate on ports during President Abdel Fattah El Sisi’s visit to Doha earlier in September.

Gulf investors have shown a significant appetite for Egypt’s Red Sea ports in recent months, though the field has so far been dominated by Emiratis. Dubai’s DP World and Abu Dhabi Ports have acquired several container terminals around the Suez Canal and the Red Sea. ADP has been hired to build and run a terminal at the ports of Safaga and Ain Sokhna, and recently bought a majority stake in a local shipping and logistics company. DP World has been strengthening its position at Ain Sokhna port, completing a major expansion at the port late last year and recently signing an agreement to build a new logistics zone.

We’re expecting more FDI flows to our maritime + logistics sectors: The Madbouly government plans to IPO as many as four state-owned maritime and land transport companies during 1Q 2023 as it looks to reboot its stalled privatization program, the local press has reported. It’s still unclear whether port owner-operators themselves could be privatized: Transport Minister Kamal El Wazir recently appeared to walk back earlier comments that the government was looking to merge seven ports into a holding company and possibly offer it on the EGX and / or to strategic investors/

Qatar is gearing up to make some big investments here: QIA earlier this month deposited USD 1 bn with the Central Bank of Egypt as a stop-gap while it completes due diligence and finalizes agreements to purchase as much as USD 2.5 bn worth of state-held stakes in unlisted companies. The two countries have also held talks about joint investments in oil and gas and in local listed firms, while Qatar Energy has been deepening its presence in our oil and gas sector this year.


Israel’s NewMed “leaning towards” floating LNG terminal over fresh pipeline to Egypt

Israel’s NewMed plans floating LNG expansion: Israel’s NewMed will likely build a floating liquefied natural gas (LNG) terminal to boost energy exports to Europe from its Leviathan gas field in Israel, NewMed CEO Yossi Abu told Reuters. NewMed — formerly Delek Drilling, a well-known partner in Egypt — had been mulling a pipeline that links Israeli fields to Egypt’s LNG terminals as an alternative to the floating terminal, as it considers different ways to expand its LNG fields and up exports to the continent.

The floating LNG terminal is “really where we are heading right now,” Abu told the newswire. The company is targeting an annual output of 21 bn cubic meters within this decade, Abu said. NewMed also plans to spend USD 550 mn on a pipeline between the wells and the gas platform at Leviathan to boost its capacity to 14 bcm from a current 12 bcm a year, Abu added.

Final decisions to come early next year: The company plans to “take an investment decision” early next year, Abu added.

NewMed still wants to grow its business here: “In 2023 we will significantly speed up Leviathan's expansion and entry into new markets, while strengthening the collaboration with our customers in Israel, Egypt and Jordan,” Abu said. NewMed sent just over a third of the 3 bcm that it pumped from Leviathan in 3Q 2022 to Egypt, according to its latest financial statement (pdf).

REFRESHER- Egypt and Israel signed a landmark gas export agreement in June to ramp up exports to the EU as it looks to phase out reliance on Russian fossil fuels. The agreement allows Israel to send more gas to Egypt’s LNG facilities for export to Europe.

In better news for our energy link-up with Israel: NewMed is hopeful its Capricorn Energy merger will go through. Talks with Capricorn Energy over its merger with NewMed are underway, and the transaction is expected to close in 1Q 2023, Abu said, downplaying recent objections from Capricorn Energy shareholders who threatened to block the transaction. Abu said he expected both companies’ shareholders to ultimately approve the merger.

REMEMBER- The Capricorn-NewMed merger would hand NewMed control of Capricorn’s assets in Egypt, paving the way for closer energy ties between Israel and Egypt and creating what the companies had described as a “MENA gas and energy champion.” That could boost Egyptian ambitions to take Russia’s place as one of Europe’s go-to energy suppliers.


Italian oil giant Eni has started drilling the Thuraya prospect on its Northeast Arish block in the Mediterranean, according to a report by oil and gas newsletter MEES. The prospect is estimated to contain over 10 tn cubic feet of gas, according to a 2022 geological report — making it around a third the size of the supergiant Zohr field that turned Egypt into a net natural gas and LNG exporter in 2018. Thuraya was owned by Dana Gas until earlier this year, according to MEES.

Other energy stories worth mentioning this morning:

  • H2 Industries is discussing offtake agreements for its waste-to-hydrogen facility, CEO Michael Stusch reportedly told Zawya. The USD 3 bn facility could produce 300k tons of hydrogen each year.
  • Jordan is still in talks with Egypt over plans to double the capacity of its existing electricity link with the country, Jordanian Energy Minister Saleh Al Kharabsheh said. (Bloomberg Asharq | watch, runtime: 1:50)


BTECH could issue its first securitized bonds by the end of the year

Electronics retailer BTECH is looking to issue more than EGP 1 bn worth of securitized bonds before the end of 2022 to finance its consumer finance operations, BTECH CEO Mahmoud Khattab said (watch, runtime: 48:36) The issuance is part of a plan to issue securitized bonds worth EGP 8-9 bn within the next five years, Khattab said.

Advisors: CIB is managing the issuance.

BTECH still sees plenty of room to grow in the domestic retail market: “We didn’t even scratch the surface,” Khattab said, adding that the company is focused on geographical expansion within Egypt, maintaining annual sales growth, and diversifying its services portfolio. The electronics giant has no plans to go public on the EGX nor to expand internationally for the foreseeable future, Khattab said, reiterating comments he made to Enterprise in an exclusive interview in October.

REMEMBER- Saudi Arabia’s sovereign wealth fund acquired a 34% stake in BTECH from Africa-focused investment firm DPI for an undisclosed sum back in October, Khattab told Enterprise.


Tatweer Misr has taken out an EGP 400 mn loan from CIB to ramp up construction at its Fouka Bay project, according to a company statement. The loan is backed by finished units at the North Coast development. Tatweer Misr expects to complete its third phase next year, and the fourth phase in 2024.


Egyptian National Railways lands funding from EIB, AFD

We’re getting EUR 316 mn from European development partners for railway upgrades: The European Investment Bank and the French Development Agency (AFD) have signed agreements with the Egyptian government to help finance upgrades to the Tanta-Mansoura-Damietta railway line, according to the EIB’s website and an AFD statement (pdf). The EIB is extending an EUR 221 mn loan, while the AFD will lend EUR 95 mn to the project.

What rail upgrades? The project involves double-tracking a 65-km stretch of the 118 km line and installing an automated signaling system. The upgrades are set to improve reliability and safety for passengers, increase the capacity to transport goods to and from the port of Damietta, and reduce carbon emissions, the AFD statement reads. The two lenders have been considering financing the project since at least 2019 (here and here.)


EV subscription startup eyes our market: Nigerian vehicle subscription startup Metro Africa Xpress (MAX) is looking to raise USD 100 mn by the end of 2023 to help it bring electric vehicle (EV) subscription to ten African countries including Egypt, Director of International Expansion David Hoyme told Bloomberg.

About MAX: Launched in 2015, the startup offers commercial drivers subscriptions for low- and no-emission vehicles. The company currently operates in Nigeria and Ghana with a 9k-strong fleet of sedans and tuk-tuks.

Our EV scene has been gaining momentum: Egypt is expected to start working on its first locally manufactured EV next year, once state-owned El Nasr Automotive wraps up a protracted search for a partner to help produce them. Al Mansour Auto and GM are also looking at partnering to locally assemble up to 15k EVs in Egypt over the next three years. Meanwhile, the government is working on plans to establish a nationwide charging network — with our friends at renewable energy player Infinity to set up 6k vehicle charging points at 3k stations across the country.

REMEMBER- Incentives for the local EV industry will be a part of the long-awaited automotive strategy, which could drop within weeks.

Other transport stories worth noting this morning:

  • DiDi Egypt introduced its first motorcycle ride-hailing service as it marks one year of operations in the local market. (Al Mal)
  • Saudi-Egyptian maritime pact: Egypt and Saudi Arabia signed an MoU for mutual recognition of seafarers’ qualifications. (Statement)



OC revenues up 20% y-o-y in 9M 2022

Orascom Construction (OC) reported a 20.1% y-o-y rise in revenues to USD 3.05 bn in 9M 2022, according to its latest earnings release (pdf). Net income recorded USD 57.8 mn in the first nine months of the year (down 24.0% y-o-y.) The construction giant's revenues were up 32.7% y-o-y to post USD 1.1 bn in the third quarter of 2022, while net income during the July-September period was down 15.8% y-o-y at USD 23.9 mn. Earnings were impacted in both 9M and 3Q by the performance of Belgium-based subsidiary Besix, as well as “higher net financing costs,” according to the release.

OC’s consolidated backlog was down 4.9% y-o-y to USD 5.7 bn as of the end of September. OC attributed the dip to the fact that the figure was calculated based on the EGP-USD rate as of 31 October, to account for the devaluation of the EGP by the central bank on 27 October. Consolidated new awards increased 10.6% y-o-y to USD 3.1 bn in 9M 2022, despite a 29.6% y-o-y drop in new awards in 3Q. Egypt accounted for 68.4% of the company’s backlog, followed by the US (24.9%) and Saudi Arabia (2.2%). OC’s pro forma backlog including its share in Besix decreased 5.1% y-o-y to USD 8.4 bn at the end of 3Q.

What they said: OC continues to prioritize “project execution, controls, supply chain and collections as the company is “still facing a challenging operating climate,” CEO Osama Bishai said in the release. We discussed OC’s moves to expand its renewable energy business, among other topics, when we sat down with Bishai during COP27 for the Enterprise Climate CEO poll.



It was a mixed bag on the talk shows yesterday, with the talking heads focusing on the expat car import scheme, the USD-EGP exchange rate, and naturally, the football.

Some 21.6k expats have registered on the government’s app to import cars since it launched on 15 November, Customs Authority boss El Shahat El Ghatwary told Kelma Akhira (watch, runtime: 7:57). Around 2k people have obtained a payment order, with total orders estimated at USD 31.5 mn, El Ghatwary said. The government is trying to draw foreign currency into Egypt through the scheme, which allows expats to import cars using foreign currency in exchange for a full rebate on taxes and dues

Is the USD going to climb higher against the EGP? El Hekaya’s Amr Adib expects the USD-EGP FX rate to accelerate “slightly” in the coming days given that a “parallel rate” is now higher than the price set by the CBE and banks (watch, runtime: 4:26). “I hope I’m wrong,” he said.

Also on the airwaves last night:

  • The House’s response to a European Parliament resolution criticizing Egypt’s human rights record was described as “powerful” with a hashtag against the resolution reportedly trending on local Twitter. (Ala Mas’ouleety | watch, runtime: 3:27 | Al Hayah Al Youm | watch, runtime: 5:26)
  • Egypt is working on joining a bid to host the World Cup in 2030 or 2034, Sports Minister Ashraf Sobhy said. The country is not planning to sign up to host the 2025 Africa Cup of Nations. (Ala Mas’ouleety | watch, runtime: 23:21)
  • The pundits commiserated over Saudi Arabia’s disappointing World Cup loss against Poland. (Ala Mas’ouleety| watch, runtime: 4:23 | Kelma Akhira | watch, runtime: 3:13)


Reuters is reporting that our economy is still in choppy waters even after reaching an agreement with the IMF for a USD 3 bn bailout package last month. The newswire says investors remain wary of the Egyptian market given our high debt servicing bill against the backdrop of an FX shortage and further expected weakening of the EGP against the USD.

Also making headlines:

  • More COP critique: Oil executives reportedly engaged in a flurry of fossil-fuel dealmaking on the sidelines of COP27. (FT)
  • The new administrative capital’s landmark Egypt Mosque and the historic Sultan Hassan mosque tell a tale of two Cairos. (The Architect’s Newspaper)
  • Greek authorities arrested seven Egyptians suspected of attempting to smuggle migrants on a boat that was rescued in Cretan waters on its way from Libya to Italy. (AP)


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The regulators are coming for crypto ‘conglomerates’ in the wake of the FTX crash: A fire has been lit under regulators looking to bring some order to the world of crypto by the unraveling of the FTX platform, Jean-Paul Servais, the new head of global securities watchdog IOSCO, told Reuters in an interview. IOSCO plans to publish a report in 1H 2023 on how to apply to crypto the principles it uses to regulate the trading of mainstream assets, Servais said. More scrutiny is needed of what Servais calls “crypto conglomerates” like FTX, which could be prone to conflicts of interest because they offer a range of activities that would be separated in mainstream financial markets, he said. FTX’s meltdown has left some 1 mn creditors with combined losses running into the USD bns.

ALSO- EU members delayed to Monday talks meant to reach an agreement to cap the price they pay to buy Russian crude amid opposition by Poland and Baltic nations, Bloomberg reported




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The EGX30 rose 1.4% at Thursday’s close on turnover of EGP 1.95 bn (37.5% above the 90-day average). International investors were net sellers. The index is up 7.0% YTD.

In the green: GB Auto (+6.9%), Alexandria Containers and Cargo Handling (+3.9%) and Elsewedy Electric (+3.9%).

In the red: QNB Alahli (-1.8%), Orascom Construction (-1.4%) and EKH Holding – EGP (-1.3%).


The EU isn’t happy with our human rights record: The European Parliament last week released a resolution criticizing Egypt’s human rights record and calling for a “review of the EU’s relations with Egypt in light of the very limited progress on Egypt’s human rights record and of its crackdown on dissent, despite continuing support from European partners.” The joint motion — which seems to have already been debated and passed by European lawmakers — also called for the immediate and unconditional release of a number of political activists, journalists, lawyers and social media influencers, including British-Egyptian activist Alaa Abdel Fattah.

Egyptian MPs push back: Egyptian parliament members attacked the resolution for being “arrogant,” “politicized” and full of “misguided information,” they said in a statement cited by Ahram Online. They pointed to a number of factual inaccuracies in the statement, including that our years-long state of emergency is still in effect, despite President Abdel Fattah El Sisi ending it last year, and that Egypt sentences minors to the death penalty, which the MPs said is banned under legislation protecting children. “Let us advise the EP that instead of using undocumented and misguided information about the situation of human rights in Egypt, it is better for its members to focus on the challenges facing human rights in the European Union countries … We see there is a systematic violation of human rights among EU countries,” the statement said.


The case for venture builders in Egypt and VCs in Africa, per Modus Capital: In the past two weeks, we’ve written about the launch of a venture builder in Egypt and a USD 75 mn Africa-focused VC fund, both courtesy of MENA-focused VC firm Modus Capital. We’re excited to see alternative investment vehicles and new Africa funds springing up amid the global VC squeeze.

How much is Modus spending? Modus’ venture builder MV Builder II — its second in Egypt — wants to build a cohort of 10 companies, giving each USD 250k in funding. The firm’s Africa VC fund is eyeing AI and blockchain-enabled “seed plus” stage startups to invest ticket sizes of between USD 350k and USD 1.2 mn. Follow-on investment tickets could go up to USD 2 mn.

We sat down with Modus Capital Managing Partner Kareem Elsirafy (LinkedIn) to talk about the firm’s plans, the case for venture building in Egypt, and why Africa is becoming an attractive market for VC investment. The global VC squeeze — and above all, covid — have heavily contributed to the need for venture builders, given a lack of dealflow and a sizable influx of investment capital, he says. And while valuations have been high across the GCC region and Egypt in the past years (we’re talking pre-correction), Africa still offers lower ticket sizes, making it attractive for VC investors.


Modus Capital has two busy years ahead: The firm’s Africa-wide VC fund will achieve financial close around this time next year, and will be deployed in 35-40 startups within 8-12 months after its close. Modus’ venture builder fund will reach financial close in June 2023, covering two years of operations and taking companies from idea stage to product-market fit in 9-18 months. Modus launched its first Egyptian venture builder back in 2019.

REFRESHER- Venture builders “build” companies by matching business ideas with entrepreneurs that have a solid track record. These ideas are then tested and backed with funding, and put on a growth path that includes technical resources to launch and scale. All the while, the startup gets hands-on support from the studio’s in-house teams, or entrepreneurs-in-residence, covering the likes of tech, HR, and PR. We anticipated a rise in venture builders in 2022 as part of our What’s Next Year in Review series.

The case for venture building in Egypt is strong: Training for entrepreneurs on how to build a solid business hasn’t kept pace with the growth of investor interest in local startups in recent years, Elsirafy says. “The availability of capital is growing significantly more than the availability of dealflow,” he says, making venture building optimal for the Egyptian market.

And the global VC squeeze has amplified the case: Down cycles are the best times because founders have to lace up their boots and make their companies work,” Elsirafy says. This survival-of-the-fittest mode — which we also saw during the outbreak of covid — only allows strong startups to stay afloat and grow. This has weakened dealflow for investors as harsh market conditions filter the pipeline of viable startups, leaving a lot of dry powder in the market and only a few places it would be safe to deploy.

The pandemic paved the way for corporate VCs: Covid made the case for digital transformation across all companies, including large and family businesses, Elsirafy tells us. These businesses set up corporate VCs to acquire and invest in startups, either to diversify their offering or add new value to their core product or service. Where the pipeline is weak, these corporate VCs can resort to building investable companies through venture builders.

What makes Egypt attractive? It's the biggest market in the Middle East and offers the best chance to develop valuable products and services, Elsirafy says. “There are enough basic 101 problems to solve, and through solving those problems, you can build valuable companies,” he explains, adding that there’s a huge amount of highly skilled talent in the country. “And if you can make a model work in Egypt, it's easier to expand into the GCC and Africa.”

Modus’ VC fund sees value across Africa: The continent’s massive population and emerging innovation ecosystem — coupled with smaller ticket sizes on average in African countries compared to startups in Egypt or the GCC — makes it attractive despite global headwinds. “Africa as a continent is the last emerging frontier market globally,” Elsirafy says. “There are others, but they dwarf in scale compared to Africa.” The case for Africa has also been gaining momentum among Egyptian investors. Take the example of the Cairo Angels Syndicate Fund, which recently appointed an African venture partner as it looks to invest in 20 startups in the Middle East and Africa.

As a late-seed or Series A-focused VC, Modus wants to check the usual boxes: When selecting companies for its VC fund, Modus looks at how much traction the company has, the market, and the founding team’s setup, as well as its ability to attract and retain talent as it grows.

Modus is looking at alternative financing mechanisms in the future: Modus is looking into exploring venture debt and growth stage funds in the future, Elsirafy says.

Your top stories on future trends for the week:



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

27 November (Sunday): Senate in session.

27-28 November (Sunday-Monday): The first edition of the Egypt Media Forum.

27-30 November (Sunday-Wednesday): Cairo ICT and Pafix, Egypt International Exhibition Center, New Cairo.

29 November – 6 December (Tuesday-Tuesday): US and Russia to hold talks on resuming mutual nuclear inspections in Cairo.


1 December (Thursday): Sphinx International Airport will begin operating international flights.

1 December (Thursday): Contractors to break ground on Egypt-Saudi interconnection project.

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

4 December (Sunday): House back in session.

4 December (Sunday): OPEC+ meeting.

5-8 December (Monday-Thursday): QS Reimagine Education Awards and Conference, multiple locations.

5-7 December (Monday-Wednesday): Food Africa 2022 kicks off at Egypt International Exhibitions Center.

6 December (Tuesday): Enterprise Climate X Forum, Grand Egyptian Museum.

7 December (Wednesday): Euromoney Egypt 2022 conference

10 December (Saturday): The TriFactory’s Pyramids Half Marathon.

10-12 December (Saturday-Monday): The 2nd edition of the Nebu Expo for Gold and Jewelry kicks off.

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.

December: Chinese President Xi Jinping visit to Saudi Arabia


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.

January: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

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.


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): 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

1 April (Saturday): Deadline for banks to establish sustainability unit.

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.


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

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


6 October (Friday): Armed Forces Day.

Late October-14 November: 3Q2023 earnings season.


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.

End of December/early January: SFE’s pre-IPO fund to kick off roadshow.

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

4Q 2022: Raya Holding subsidiary Aman and Qalaa Holdings’ Taqa Arabia to launch their fintech company.

4Q 2022: Saudi Arabia’s 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.

1Q 2023: Internal trade database to launch.

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