UK government to provide USD 1.6 bn funding package to Carbon Holdings’ Tahrir plant -UK Investment Minister
EXCLUSIVE- The UK will be providing Carbon Holdings’ Tahrir Petrochemicals Corporation with “an unprecedented” USD 1.6 bn financing package through UK Export Finance, the country’s export credit agency, UK Minister of Investment Graham Stuart told us in an interview in Cairo yesterday.
TPC could help double Egypt’s total exports, catalyze industrial growth: “We are excited about Egypt developing its downstream capabilities and supportive of the aspiration that the plant could help double total Egyptian exports,” he said, adding that the project will not only create jobs, but could also serve as a “catalyst for the development of more manufacturing and other labor intensive activities.” The UK government is in the “closing stages” for the financing, he also said. Carbon Holdings had said last month it was planning to reach financial close on the nearly USD 11 bn project by year’s end. The outfit is covering 26% of the plant’s cost with equity commitments, with the remainder of the finding package taking the form of loans backed by development finance institutions from countries including the UK, United States and Germany, the company said at the time.
Show of confidence in Egypt: The financing package for TPC is a “show of confidence” in Egypt and its reform program from its “top foreign direct investor,” Stuart said, adding that UK investments round off to 41% of Egypt’s total FDI inflows.
UK investors see opportunity across a wide range of sectors in Egypt, including tech and education, which hold a lot of untapped potential,the minister said.
Prosthetics maker Blatchford is planning to establish a major “state-of-the-art microprocessor limb manufacturing plant” in Egypt that is expected to “help develop that kind of technological capacity in the country.”
Investing in K-12, post-secondary education: Education and the development of human capital also offer opportunities, he added, pointing to a 2017 agreement between the government and personal learning platform Kortext to ensure the availability of Education Ministry-issued textbooks to school students. The British government is also trying to support the establishment of British university campuses in Egypt, with Liverpool University already in advanced talks to open a local branch.
On oil and gas, a traditional strength for the UK in Egypt, companies including Shell and BP are already well established in the local market, Stuart said. The minister met with Oil Minister Tarek El Molla yesterday, according to Al Masry Al Youm. El Molla directed UK investors to new tenders out for oil and gas exploration and plans underway to turn Egypt into a hub for natural gas exports, particularly to Europe.
“Double-down” on reforms: The British government is looking to “explore ways that we can support the government’s reform program,” which has already delivered results such as lower inflation and unemployment rates, Stuart also told us. “We want to be partners in helping them strengthen that.” The UK, through the London Stock Exchange, has already helped Egypt raise USD 11 bn in sovereign bonds and is ready to help private sector companies looking to join the financial market. “It’s a constant battle to work to get your fundamentals right and the government’s made great progress over the last two years,” he said. “Our recommendation would be to double-down on that and say that you got to keep working to improve the ease of doing business and to give investors confidence and create the best possible environment to attract and retain investors.”
Does that mean flights to Sharm will be back soon? Don’t get ahead of yourself, Bubba. Talks on that front are ongoing, Stuart said: “We’re pointing out that we have 47 flights a week from the UK to Egypt as we stand,” including trips to Marsa Alam, Luxor, and Hurghada, he said, noting that UK tourist arrivals to Egypt nearly doubled last year, “and we’re expecting the same again to happen this year.”
Post-Brexit trade relations are also secure, the minister said. The UK government is working hard to ensure that its exit from the European Union will not impact its freetrade agreements with all its trade partners, Egypt included. While both governments are keen on the continuity of trade ties, talks over new bilateral agreements will have to wait until the UK is both out of the EU and the implementation period that will follow, he told us.