Egypt investment prospects valued at $173 billion in 2015

JEDDAH — Investors both foreign and regional, have recently amped up their interest in investing in Egypt despite the current political situation, with several encouraging indicators of growth pointing towards a remarkable pick-up in economic development over the next two to three years. There are over $173 billion in un-awarded projects in Egypt as recently as September of this year, according to MEED Projects, the region’s leading projects tracker.

Profiling the investment opportunities, and understanding the full size of these possibilities post the recent elections, will be discussed at the upcoming “Invest in Egypt” Conference organized by MEED Events on Nov. 26-27, 2014 at the Jumeirah Etihad Towers, Abu Dhabi.

MEED’s ‘Invest in Egypt’ of which the opening address at the event will be delivered by Dr. Sultan Al Jaber, UAE Minister of State is a platform to learn about investment possibilities in the Egyptian infrastructure, banking, real estate, power, petrochemicals & manufacturing sectors.

The Conference is scheduled to provide an accurate and reliable assessment of the new political environment post the recent elections while detailing the investment frame- work for the country over the next 5-10 years.

Prominent speakers representing gulf and Egyptian stakeholders, plus international and regional investors will be in attendance to unwrap Egypt’s projects market and share developments with the delegates, as well as funding potential in all the major sectors.

The conference will also provide an assessment of the appetite of multi-lateral, international & regional lenders to invest in the Egyptian market, and review the markers of the country’s economic stability in order to assist investors in mitigating the issue of risk while creating a pro-investment environment.

These topics and others will be discussed at great length at the conference which will include sessions on the GCC investors’ perspective on the market and an update on the status of the Egyptian Private Public Partnership program, and how its development will be accelerated in the next 12-24 months with the announcement of the anticipated roll-out of projects that will be procured through PPP, key infrastructure ?nancing issues in Egypt in the power, renewable energy, transport and housing sectors with an introduction to the opportunities in these sectors from clients and project heads.

Foreign firms continue to maintain their presence in the country with an influx of investment continuously pouring into the country making it all the more attractive for foreign and regional banks and high net-worth individuals to continue to scout for new opportunities or to expand even as some of these banks scale back in nearby countries such as Lebanon.

While foreign direct investment and the real estate sector continue to grow exemplified by the recent purchase of a 5.1 percent stake in Egypt’s second-largest listed real estate developer Palm Hills by Aabar – a subsidiary of the UAE’ s sovereign wealth fund run by the government of Abu Dhabi – for 5.6 billion Egyptian pounds ($785 million) putting the value of the investment at around 285 million Egyptian pounds, according to Reuters calculations; the Egyptian government has begun to introduce new investment laws to help ease doing business in the country and to continue to woo investors in the hopes of sustaining the country’s stability.

This includes amendments to the tax code to encourage the growth of small- and medium-sized enterprises, and legal requirements are under renewed consideration to find ways of doing businesses while improving efficiency.

In 2013, Egypt announced plans to implement a public infrastructure investment strategy to assist in funding new projects in the country through a two-tiered, two year multi-billion dollar stimulus package to fund the construction of more than 300 schools and 100 hospitals, renovating public housing and utilities and doubling the number of grain silos in the country, as well as paving new roads and building a new railway system to span across the country.

The infrastructure plans, combined with less apparent political risks and the large infrastructure stimulus funded by investors from the GCC has encouraged investors from Europe and America as well as international banks to become active players in the Egyptian economy.

The financial backing Egypt has received from Saudi Arabia and the United Arab Emirates has also been a main propagator of continued investor confidence with more than $20 billion in investments from the Gulf states in Egypt in the form of grants, loans and petroleum products since last year, with the UAE also funding an additional $8.7 billion in energy imports in the coming months.

These indicators and the continued investment in the energy, food, technology, infrastructure, finance, real estate and housing, and petrochemicals combined reinforce that there is a firm foundation of optimism for increasing the level of participation in the Egyptian economy.

“As Egypt turns the tide on the challenges of the past few years, the country is returning as a key investment hub for GCC and global investors alike — a development for which EFG Hermes is well-prepared and as a firm with strong Egyptian roots and a broad, established regional presence, EFG Hermes is uniquely positioned to facilitate intra-regional investment opportunities,” said EFG Hermes Co-Chief Executive Officer Karim Awad.

According to independent financial analysts, these smart investments will help boost GDP growth by 1.5 percent.  Additionally, official figures released last month, show the total investment in the fiscal year to the end of June was 12.9 per cent higher than the year before.

The HSBC Purchasing Managers’ Index, a measure of economic activity, reached a near-record 52.4 in September, signaling a further improvement in the health of Egypt’s non-oil private sector.

Commenting on the notable increase in business confidence, Ahmed Abdelaal, Regional Head of Corporate Banking & Structured Finance, HSBC Middle East and North Africa, said: “Egypt’s strategic geographic location and open trade hub continue to be key drivers for the economy going forward.

According to our latest Trade Confidence Index, businesses in Egypt are very confident about import and export trade over the next few months – ranking highest amongst all 23 countries surveyed across the globe.

This is a positive indicator of the Egypt’s anticipated economic growth and showcases country’s strong fundamentals and potentials. HSBC remains optimistic about Egypt’s long term potential and the country continues to feature as one of the Bank’s key markets for focus and investment.”

Despite major political, economic, and social transformations, the country has the basic foundations for the Egyptian economy to endure as a market with enormous potential.

To illustrate the above and to provide a comprehensive understanding of the opportunities and challenges of doing business in the reinvigorated Egyptian project market, the conference will be preceded by a Master-class on doing business in Egypt on Nov. 26.

Under the direction of an Egyptian business specialist, the session will give a step-by-step guide to entering the Egyptian market by presenting case studies and blueprints for project success. The session will also draw on examples from a number of relevant business sectors to meet the needs of attendees’ at the event.

The MEED Invest in Egypt Conference is scheduled on Nov. 26- at the Jumeirah Etihad Towers in Abu Dhabi. — SG