International support expressed, tens of deals closed, billions of dollars promised – these are the top highlights of the three-day economic summit held on March 13-15 in the Red Sea resort town of Sharm El-Sheikh.
The impressive results of Egypt Economic Development Conference (EEDC), Egypt the Future surpassed all expectations inside and outside the country. Investors and politicians admitted that the four-year turmoil didn’t destroy Egyptian economy, and the country led by “a thoughtful visionary” has excellent prospects.
In fact, the event clearly showed West’s changing mood towards Egypt. The states, which recently slated Cairo for launching air strikes against jihadists beheading 21 Egyptian Christians, delegated their high-ranking representatives to attend the conference. Moreover, US Secretary of State John Kerry spoke in favor of standing up and fighting “against extremists and terrorists”, as “they want to destroy and go back in time” and “we want to build and go to the future”.
He said the United States are committed to supporting Egypt’s economic reforms, reporting that last year, under the auspices of the US Chamber of Commerce, 160 CEOs, leading business people representing some 70 countries came to Egypt “to spend time with President el-Sisi and his administration in order to help define the future”.
“We’ve committed some 300 million for the Egyptian-American Enterprise Fund and another 250 million for OPIC loans to guarantee to support the development of small and medium-sized businesses. And just our Qualifying Industrial Zone program has already spurred more than 800 million in Egyptian exports to the United States last year and supported 280,000 Egyptian jobs. That’s in addition to a billion dollars of loan guarantee, 500 million dollars of recent investment by The Coca-Cola Company, General Electric, others who are deeply committed to this enterprise,” Kerry informed at the conference, emphasizing that there are still challenges, “but the road ahead is absolutely clear and so is the United States determination to support Egypt’s progress in any way that we can”.
During the summit General Electric (GE) announced that it is on schedule to support Egypt’s power grid with 2.6 GW by summer 2015. According to the official website of the event, the deal with the company implies delivery of 46 turbines, of which 34 have already arrived in Egypt. The total cost of the power plant American firm plans to build is $1 billion.
As Egyptian State Information Service (SIS) informs, the President of the country Abdel Fattah el-Sisi asked GE “to raise the efficiency of power stations within eight months only instead of 24 months, and they approved”. As for the financial cost of the project, the President said, they agreed on cutting down 100 million Euros out of the total cost.
A $10 billion contract is signed with German industrial powerhouse Siemens International; the company is in charge of constructing several power plants with a total production capacity of 6.6 GW. According to Egyptian officials, the package includes binding agreements worth $4.6 billion for a 4.4 GW power plant in southern Egypt, a wind turbine generating 2 GW and a new wind rotor blade factory.
“Egypt has great potential for wind power generation, especially in the Gulf of Suez and the Nile Valley,” asserted Markus Tacke, CEO of Siemens Energy Sector's Wind Power Division.
Emirati Masdar and Saudi ACWA Power International will invest $2.4 billion in construction of a number of power plants, including solar plants and wind turbines. The total production capacity will be 4,400 MW. Another $7 billion ACWA will put up in building of a coal power plant.
Oil and Natural Gas
As Philip Hammond, the UK Foreign Secretary, said at the conference strong Egyptian economy is firmly in London’s interest as the foundation for security and democracy. He reminded that the largest foreign investor in Egypt is British Petroleum, which expressed readiness to invest $12 billion in Egyptian gas fields. According to Reuters, this should lead to the production of 3 billion barrels of oil equivalent.
Another British energy company BG signed a $4 billion contract for development of natural gas fields in the Mediterranean.
A $5 billion deal that aims Egyptian oil and gas industry development was signed by Italian Eni SpA. The project should be implemented in the next four years. The total value of investments will result in the production of 200 million barrels of oil and 1.3 trillion cubic feet of gas.
The Prime Minister of Italy Matteo Renzi emphasized his country’s support of Egypt which is trying “to achieve an inclusive economic and social future for Egyptians”. “We have an incredible past, but I am sure we have an incredible future, and together we will build it”, he assured.
The UAE’s Dana Gas intends to allocate $350 million in drilling of nearly 40 new development wells, rehabilitating the existing wells, building new pipelines and debottlenecking an existing plant over the next 30 months.
Transportation and Logistics
During the three-day event Egypt signed six deals with international companies for logistics and transportation projects. The total worth of the agreements reaches $2.2 billion, out of which $415 million will be spent at the station at Ain Sokhna port and $1 billion – for the manufacturing train carriages and an electric train.
Shopping and Retail
A $655 million agreement is signed with Emirati mall operator Majid Al-Futtaim. The contract implies constructing retail centers in new cities and shopping centers in Cairo. This will create up to 144,000 direct and indirect job opportunities by 2018, Alain Bejjani, CEO of Majid Al-Futtaim group, informed.
Two-billion investment is announced by a private Emirati investment group Khalifa bin Butti Bin Omeir (KBBO) Group. The company that works in financial service and defense is going to put up money in different key sectors of the Egyptian economy.
Al-Swidan Group, another company from the UAE, signed two deals worth a total of $6 billion. One of them implies investments in the grain logistic hub in Damietta, located in Delta, another – in the Suez Canal Development Project.
A number of Indian companies have also shown interest in the project, intended to be a regional hub to store, trade and process grain.
According to the official information, investment deals totaled up to $36.2 billion, construction projects reached $18.6 billion and loans – $5 billion; besides, Saudi Arabia, the UAE and Kuwait announced direct grants of $4 billion each to provide funds urgently needed by the Egyptian government. In all, more than $70 billion agreements have been already, another $90 million pledged in Memorandums of Understanding.
“Egypt will never forget those who supported it”, the President of Egypt said in his closing speech at EEDC and added that his country actually needs some $200-$300 billion to give a real hope to 90 million Egyptians.
“People thought my country had died. But no, Egypt is a country God created for eternal life... I remind Egyptians and the world that Egypt is awakening now," he stated.
At the same time the President pointed out that government takes “a lot of efforts” to make the life of regular Egyptians better, but results are not evident yet, though his team is determined to overcome its difficulties.
Investment Law to Be Improved
After the economic summit in Sharm el-Sheikh Ministry of Investment of Egypt started working on a new investment law, which might attract more funds.
“There is growing confidence in Egypt’s investment climate. A new investment law is expected to add to this momentum. Creating a one-stop shop for foreign companies, as well as a resolution mechanism for disputes, the law aims to make investing in Egypt more attractive. Already, the business climate in Egypt is growing in strength. The economy is now ranked second in the world for returns on investment and in the first quarter of 2015, Egypt enjoyed a 6.8% growth rate. Unemployment fell to 13.1% and foreign direct investment (FDI) reached $1.8 billion, doubling the amount of FDI for the same period last year”, Ashraf Salman, Minister of Investment said, The Worldfolio reports.
The Egypt Economic Development Conference was organized by Richard Attias, a Moroccan events producer, who has also arranged the annual World Economic Forum in Davos, Switzerland.
Comoros, Cyprus, Mali, Palestine, Rwanda, Somalia and Sudan were represented at the summit by their presidents; Bahrain and Jordan – by their kings; Kuwait – by its Emir; Saudi Arabia delegated the Crown Prince; prime ministers were sent from Ethiopia, Italy, Lebanon and Oman; vice presidents – from Tanzania and the United Arab Emirates; the speaker – from Libya and the Secretary of State – from the USA.
China, France, Germany, Malawi and Russia delegated ministers of commerce, finance, economics and trades; foreign ministers represented Eritrea, Spain and the UK.
The event was also attended by managing directors of International Monetary Fund and World Bank Group.
“With 22 heads of state and 3,500 delegates, it's the largest summit of CEOs and world leaders I've ever seen,” Richard Attias said.
According to his letter published in Huffington Post, now Egypt as “a hub between the Arab world, Africa, Asia and Europe”, “has all the cards in hand to become one of the world's economic champions”.