Back to the complete issue
Sunday, 13 March 2022

A first look at the long-awaited automotive strategy + Bidding for new EV charging company management this week

The long-awaited automotive strategy is about to be unveiled: Cabinet reviewed last week the final version of a national strategy to develop the automotive industry, according to a statement. No further information was given on when exactly to expect the strategy’s launch — which were previously told would come by the end of last year — but the statement did provide a few details about what it will include.

Meet the Egyptian Automotive Industry Development Program (AIDP): The strategy will include incentives to localize the electric vehicle and automotive feeder industries under the AIDP, with the aim of enhancing the country’s existing assembly and manufacturing capabilities — and of encouraging new investment to the sector, the statement said.

The program will initially cover the assembly of passenger cars, SUVs, vans and microbuses, according to the statement, as well as R&D centers, testing labs, and automotive software development centers that feed local production and assembly. Participation is optional and comes with a number of incentives.

What kind of incentives will be up for grabs? AIDP will introduce a tariff system that should facilitate customs release procedures for participating firms, support new investment from original equipment manufacturers (OEMs) in Egypt, and encourage assemblers to switch to CKD assembly, according to the statement. CKD, or complete knocked-down assembly, is when a local assembler puts together a completely disassembled vehicle from imported parts (as opposed to CBU assembly, where completely built vehicles are imported, or SKD assembly, where partly-assembled vehicles are imported).

AIDP will also cover the EV industry: AIDP will provide cash incentives of up to EGP 50k for buyers of locally-assembled electric vehicles, the statement said. The government is working to enlist international partners to produce locally assembled electric cars in El Nasr Auto’s factory. Real estate developers will also be obliged to build a certain number of charging points at their residential and commercial projects.

BACKGROUND: The legislation for the automotive strategy has been in the works since 2016, and has gone through years of delays, revisions and overhauls. The strategy aims to grow a car manufacturing industry that can compete with EU, Moroccan and Turkish imports.

ALSO IN AUTOMOTIVE-

Want to manage the government’s EV charging station company? Companies looking to manage and operate a soon-to-be-established state company for electric vehicle charging stations have until this Thursday, 17 March to submit their bids, according to a Public Enterprises Ministry statement. The company will be set up under a public-private partnership, and will deploy around EGP 450 mn to set up 3k charging stations within 18 months in Cairo, Alexandria, Giza, Sharm El Sheikh and several highways, the statement says.

What they’re signing up for: The private sector partner selected to manage and operate the company will be locked in with a medium-term contract for its services, in exchange for a portion of the company’s net income. The company or consortium will also be required to put up 25% (c.EGP 37.5 mn) of the JV’s capital.

What’s next: The ministry will announce the qualified bids the following Thursday, 24 March.

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; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.