Egypt Talks with US on Free Trade Area Starts Next Year Source: Global News Wire, May 29, 2005
Egypt-US negotiations on setting up a free trade area will probably start early next year when the US administration and Congress finishes negotiations with some countries in Central America, US economic sources said.
The sources described the proposed agreement in this concern as useful for the two parties and is considered one of the best ways to push forward development in Egypt which enjoys a strategically location and is a pivotal country in the Middle East.
The sources indicated that if the US really wants reforms in the area, it must help and it is better to begin with Egypt for its rational and moderate stances.
Executive MBA with George Washington University Now in Cairo Source: American Chamber of Commerce in Egypt, May 31, 2005
The Career Development Center (CDC) (link here) of the American Chamber of Commerce in Egypt in collaboration with the Faculty of Commerce of Alexandria University (link here) will offer an Executive MBA Program with the George Washington University School of Business (link here).
The new MBA program will be offered for the first time in Cairo under a grant agreement of the US/Egyptian University Partnership Program of the Binational Fulbright Commission (AmCham Member). The Supreme Council of Universities (link here) has approved the new MBA program.
Mission to the US to Build Solid Relations in ICT Source: Egyptian Universities Network, May 18, 2005
Minister of Communications and Information Technology, Dr. Tarek Kamel, is scheduled to travel on a mission to the United States of America from June 18- 28. The purpose of the mission is to build solid relations between the Egyptian Ministry of Communications and Information Technology (MCIT) (link here) and the ICT industry in the US as well as improve relations with various US government entities. Networking with the US private sector, raising awareness about Egypt, encouraging investment in Egypt are also among the important purposes of the visit. The mission will travel to Washington D.C. and California accompanied by a delegation of members of the ICT committee of the American Chamber of Commerce in Egypt (link here).
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EU Commission Ready to Increase Finance of Twin-ship Project Source: Egyptian State Information Service, May 30, 2005
The European Union Commission (link here) announced it is ready to increase volume of finance of the twin-ship program signed between Egypt and the EU, which allocated Euro 25 million for this purpose.
Minister of International Cooperation Fayza Aboul Naga said that the execution of the projects relating to the institutional twinship agreement between Egypt and the European Union would start early before the agreement is signed at the end of the year. The program will include four projects submitted by the Ministries of Communications and Information Technology (link here), Transportation and Tourism.
Egypt and Germany Sign Two Cooperation Agreements Source: Egypt State Information Service, May 30, 2005
Minister of International Cooperation Fayza Abul Naga and German Ambassador in Cairo Martin Kobler inked on Sunday, May 29, two cooperation agreements in the technical and financial field.
Under the two agreements, the German government will allocate 94.5 million Euros to finance development projects in Egypt including building schools in rural areas and providing improved irrigation ways.
At a joint press conference, both officials underlined the importance of German President Moust Hoehler's official visit to Egypt by the end of this year, at an invitation President Hosni Mubarak.
Kobler asserted the significance of Egypt's participation in the Arab-German Economic Forum, to be held in Berlin mid June. Egypt will attend the forum as a guest of honor.
The diplomat said the forum would provide a chance to lure foreign investments to Egypt in light of the recent economic measures adopted by the new Egyptian government to raise the volume of trade exchange.
The forum will be attended by Foreign Trade and Industry Minister Rashid Mohammed Rashid along with 61 Egyptian businessmen.
Four Foreign Banks Eye Stake in MIBank Source: Reuters, May 16, 2005
Four foreign banks have been short-listed to bid for shares in Egypt's Misr International Bank (MIBank) (AmCham Member) (link here) that are now owned by an Egyptian state bank and other institutions.
The bank announced that four international banks have been short-listed and have started conducting their due diligence process of MIBank prior to submitting their final bids.
It said the deal involved the sale of shares held by state-owned Banque Misr (AmCham Member) (link here) and other shareholders, but it did not give the size of the stake on offer or name the other investors selling their stakes.
Banque Misr holds about 25.5% in MIBank and other institutional shareholders together own a further 32.25%.
MIBank listed the four potential bidders as the French banks Societe Generale (SocGen) (link here), BNP Paribas (AmCham Member) (link here), Britain's Barclays (link here) and Bahrain's Ahli United Bank (link here).
SocGen and Barclays have both recently increased their stakes in their Egyptian operations.
The Egyptian government has said it plans to sell the state's stakes in private-public joint venture institutions like MIBank as part of a privatization drive.
Alongside Banque Misr, the other main shareholders in MIBank are Misr Insurance Company (link here) (3.25%), Banca Di Roma International (link here) (10%), British Arab Commercial Bank (link here) (8.5%), Europartners Holding(7.875%) and Sumitomo Mitsui Banking Corporation (link here) (2.625%).
The rest of MIBank's shares are available on the Egyptian and London Stock Exchanges.
Misr America International Bank Acquired Source: Al Ahram Newspaper, May 24, 2005
The Arab African International Bank (AmCham Member) (link here) acquired 100% of Misr America International Bank’s (link here) shares in a LE239.5 million deal concluded on May 23.
ELNG Invites Banks For MLA Source: Middle East Economic Digest, May 27, 2005
Egyptian LNG (ELNG) (link here) has invited 20 local and international banks to join the mandated lead arranger (MLA) group on the $529 million debt finance package for its second liquefied natural gas (LNG) train at Idku on the Mediterranean.
The banks have until June 10 to respond. Financial close is expected by the end of June. The 12-year debt package is providing the bulk of the $880 million that ELNG is seeking for the scheme. A further $284 million is coming from the European Investment Bank (EIB) (link here) and will be signed once the finance package is in place.
In April, ELNG appointed five pathfinder banks to carry out preliminary work on arranging the facility. They are Bank of Tokyo-Mitsubishi (link here), Calyon (link here), Commercial International Bank (AmCham Member) (link here), HSBC (AmCham Member) (link here) and Standard Chartered Bank (link here). Societe Generale (link here) is acting as financial adviser.
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Third Mobile License Bids Sought Source: Business Monitor International, May 18, 2005
The Egyptian government is seeking bids for a third 3G mobile telecom license to be awarded in early 2006, according to Communications Minister Dr. Tarek Kamel.
The third company will begin operating alongside Vodafone Egypt (AmCham Member) (link here) and the Egyptian Company for Mobile Services (MobiNil) (AmCham Member) (link here) in the second quarter of 2007.
The tender will be launched imminently by the National Telecom Regulatory Authority (NTRA) (link here) and comes after approval for the competition was granted in mid-May by Prime Minister Ahmed Nazif and Communication & Information Technology Minister Tarek Kamel.
Competition for the license is expected to be fierce and industry analysts are predicting the new company will be able to capture about 20% of the overall mobile market in its first four-five years, which has been expanding at about 25% a year, taking mobile subscription to about 8.8 million.
However, plans to establish a third mobile network have been delayed several times since they were first proposed in 2002. In September 2003, the cabinet decided to postpone the launch for at least six months, after considering a report from state-owned fixed-line operator Telecom Egypt (TE) (link here) which proposed either proceeding with the launch or taking a stake in Vodafone Egypt. An alternative plan to find an international partner to take a stake in TE’s GSM division was then shelved.
Bids were due in by May 29 for contract to advise Cairo on the part-privatization of TE. TE is the largest fixed-line provider in the Middle East, serving about 9.5 million subscribers, about 14% of the country’s population.
Magnesium International Power Supply Contract in Egypt Source: RWE Australian Business News, May 27, 2005
Magnesium International Ltd (link here) announced today its joint venture company; the Egyptian Magnesium Company (EMAG) had signed a power supply contract with the Egyptian Electricity Transmission Company (EETC).
Through this agreement, the Egyptian Government has agreed to the provision of 128 megawatts of electricity for the first module of the smelter, increasing to 248 megawatts in the second phase. The magnesium plant is in Ain Sokhna.
The project consists of two phases. In the first phase, the plant will be provided with 120 Megawatts of electricity by February 2008; in the second phase it will be increased to 248 Megawatts by 2009 or 2010.
The project will also include providing the plant with two transformers with a capacity of 220/33 kilovolts. A third transformer will be added during the second phase of the project.
The electricity supply is essential to ensure the efficient operation of EMAG's planned world-class magnesium smelter, which initially aims to produce 43,000 tons a year of pure magnesium metal, rising to 88,000 tons in the future and representing around 17% of world's production of this metal.
Kuwaitis to Fund Damietta Container Terminal Source: Middle East Economic Digest, May 20, 2005
A group of Kuwaiti investors has signed a Memorandum of Understanding (MoU) with Damietta Port Authority for a 40-year concession to build a new $1,000 million container terminal at the port. Under the terms of the agreement, Kuwait & Gulf Link Transport Company (KGL) (link here) and Aref Investments Group (link here) will design, build, finance and operate the new facility, which will be able to handle about 500,000 containers a year in the first phase.
The scheme, which will occupy a 1 million-square-meter area at the port, will include the construction of new docks and warehousing as well as deepening of the existing channels and docks, in order to take large Panamax tankers. Project costs for the first phase are estimated at $420 million and a planned $580 million second-phase expansion will raise the capacity to 1.5 million containers a year.
In March, KGL signed a MoU with DPA to carry out a six-month feasibility study into a planned expansion of the container terminal.
IFFCO Announces $1 Billion Investment Plan Source: Global News Wire, May 30, 2005
The world's largest fertilizer cooperative, Indian Farmers Fertilizer Cooperative Ltd (IFFCO) (link here) announced a $1 billion investment plan, to ramp up domestic fertilizer production capacity and reduce energy consumption at its ammonia-urea plants.
IFFCO plans to set up a state-of-the-art phosphoric acid plant in Egypt with a capacity of five hundred thousand tons of phosphate (P2O5) per annum in joint venture with El Nasr Mining Company (ENMC) where India will receive 60% of the investment and the rest will go to Egypt.
Out of the $1 billion investment, around $800 million would be invested in backward integration of DAP/NKP production, while the remaining $200 million would be invested in energy saving and urea production and expansion schemes. IFFCO's internal funds would provide $330 million while banks would loan the remainder.
The cooperative has lined up investment plans from sourcing of rock phosphate to producing phosphoric acid, which would eventually be used to make di-ammonium phosphate.
IFFCO will hold 75% while the Egyptian company would hold the balance equity. As per the agreement, ENMC would supply two million tons of rock phosphate to the joint venture company and IFFCO would buy out the entire production for use in its Indian plants.
IFFCO managing director US Awasthi told a press conference that this investment plan would increase fertilizer production capacity of the company to 86 hundred thousand ton per annum from the present 61 hundred thousand ton. Energy consumption will also be reduced by 50%.
The cooperative is planning to maintain a 2:1 debt equity ratio for the total plan and is in talks with major domestic and international financial institutions. Around $670 million would be raised in debts and $330 million in equity.
TATA CHEM Bids For Egyptian Fertilizer Company Source: Global News Wire, May 26, 2005
TATA Chemicals Ltd (TCL) (link here) has made an open offer for 1.475 million shares of $100 each of Egyptian Fertilizer Company (EFC) through its wholly-owned subsidiary, Homefield International Pvt Ltd, subject to required approvals. While the company has not disclosed the figure, press reports put the bid price at $450 million.
A five-way bidding war has broken out between a group of international investors seeking to take a controlling interest in EFC. The auction began on May 17, when the adviser on the sale, the local EFG Hermes (AmCham Member) (link here), announced that it was seeking bids for the sale of 88.25% of EFC. The stake includes a 46% share held by state-owned Egyptian Petrochemical Holding Company (ECHEM) (AmCham Member) (link here). The rest is held by local and regional investors.
The other four companies that have expressed interest in the sale are: Canada’s Agrium (link here); Saudi Basic Industries Corporation (Sabic) (link here); Egypt Kuwait Holding Company; and local private equity company Citadel Group (AmCham Member), which is bidding together with a number of investors from the Gulf.
EFC has a plant to manufacture about 400,000 tons of ammonia and 650,000 tons of urea, employs about 400 people and has a marketing presence in Europe, North America and Africa. Its cost of production is deemed low. The company is in the process of doubling its capacity (in both urea and ammonia) before the end of 2006. Work for this is already halfway through. For TCL, funds for the bid would come from its recent $150-million foreign currency convertible bond issue, internal accruals and a bridge loan.
TCL has been on an expansion path since it acquired and merged the erstwhile Hind Lever Chemicals Ltd (HLCL); a move that brought into its fold the latter's Haldia-based phosphatic fertilizer plant of over 1.2-million tons (mt) capacity. TCL's own fertilizer capacity at Babrala in Uttar Pradesh is 742,000 tons a year with an ammonia plant of 1,350-tons-per-day capacity alongside.
Cairo Power Plans Move Source: Middle East Economic Digest, May 20, 2005
Egyptian Electricity Holding Company (EEHC) (link here) will sign by the end of May two major packages on its $315 million project to build a 750-MW combined cycle power plant at Kureimat, 90 kilometres south of Cairo.
The agreements cover a $60 million civil engineering contract, which has gone to the local Arab Contractors (Osman Ahmed Osman & Company) (AmCham Member) (link here), and a $15 million switchyard contract awarded to Germany’s Siemens (AmCham Member) (link here). In January, the contractor signed an estimated $100 million contract to supply two 250-MW gas turbines.
EEHC is also evaluating bids from six international companies for the contract to supply one 250-MW steam turbine on the project. It is also reviewing bids from four international companies for the estimated $4 million-5 million water and wastewater treatment contract.
Italy’s WTD (link here) is in exclusive negotiations with East Delta Electricity Production Company (EDEPC) for a similar water contract on the $315 million project to build a 750-MW combined cycle power plant at Talkha. EDEPC is also in talks with two contractors for the heat recovery package on the project: Belgium’s CMI (link here) and a company identified as MEM (link here). The consultant on both projects is the local/US Power Generation Engineering & Services Company (PGESCo) (link here).
The projects are part of the Electricity & Energy Ministry’s 10-year generation expansion program, which has recently been revised. Three new power plant projects are to be launched in the next 12 months, including a 650-MW plant at El-Tebine, a second 750-MW unit at Kureimat and a 650-MW plant at Cairo West.
Cairo is negotiating funding from several sources for the projects. The African Development Bank (link here) is expected to finalize funding for the $350 million Kureimat plant at the next meeting of its board of directors in Tunis at the end of June.
Sources involved in the project, which incorporates two 250-MW gas turbines and one 250-MW steam turbine, say the first tenders could be issued before the end of the year. An application for funding for the estimated $250 million El-Tebine plant is being reviewed by the World Bank (link here). Funding for Cairo West is coming from Kuwait-based Arab Fund for Economic & Social Development and the Kuwait Fund for Arab Economic Development.
Chilean Enap Makes Oil Discovery in Egypt Source: Latin America News Digest, May 26, 2005
Chilean state-run oil company Empresa Nacional de Petroleo (Enap) (link here) has made its fourth oil discovery in Egypt, via its international crude oil unit Sipetrol International (link here), the company said on May 25, 2005. The oil field was discovered in Egypt's western desert, in the El Diyur block. Enap holds a 41% stake in the block, in association with U.S. Apache Corp. (AmCham Member) (link here) that holds a 46.5% stake in the block. The production capacity from the new oil discovery stands at 1,000 barrels of crude oil per day (bpd). In September 2004 ENAP made an oil discovery in the North Bahariya block, with a capacity of between 940 and 2,300 bpd.
Sipetrol operates various projects in Argentina, Brazil, Colombia, Ecuador, Egypt, Guinea Bissau, Iran and Venezuela.
Egypt and France Cooperate in Electricity Source: IPR Strategic Information Database, May 19, 2005
Egypt and France on Tuesday signed two contracts for starting modernizing Talkha, Delta power plant at a total cost of LE302 million and a capacity of 750 megawatt. The operation will be carried out by the French Alstom Company (link here) and the Egyptian East Delta Company for Electricity Production.
The operation, said Minister of Electricity Hassan Yunis on May 17, is part of a plan by his ministry to back up the national power grid to meet the mounting power consumption in Egypt until the year 2007. The projects, he explained, is aimed at meeting the needs of development projects in the domains of industry, agriculture, tourism and household.
Altco Takes Delivery of LNG From Egypt Source: New Straits Times Press, May 31, 2005
Petroliam Nasional Bhd's (Petronas) (link here) subsidiary Asean LNG Trading Co Ltd (Altco) has taken delivery of the first liquefied natural gas (LNG) cargo from its joint venture project in Idku, Egypt.
In a statement, Petronas said the delivery was Egypt LNG's first cargo commitment under the project's Train-1 early completion sale and purchase agreement signed with Altco.
Under the agreement, Altco will lift about three cargoes of LNG throughout the plant's early completion period.
The LNG was loaded onto Puteri Zamrud Satu, an LNG vessel owned by Petronas subsidiary Malaysia International Shipping Corp Bhd on May 29.
The Egypt LNG project comprises the development and the operation of two train LNG liquefaction plants and related infrastructure, about 50km east of Alexandria. The plant receives its feed gas from the West Delta Deep Marine Concession Area where Petronas holds a 50% working interest.
Petronas, which first entered Egypt in 2001 through a joint venture with Shell (AmCham Member) (link here)in the North Mediterranean Deep Water block, is an active player in the country's upstream and downstream oil and gas activities.
It has a strategic interest in the Egyptian LNG project in partnership with BG International Ltd (AmCham Member) (link here), Egypt General Petroleum Corp (link here) and Egyptian Natural Gas Holding (link here).
Globeleq Completes Sidi Krir Takeover Source: Middle East Economic Digest, May 27, 2005
The US’ Globeleq (link here), part of the CDC Group (link here), has taken full ownership of the build-own-operate-transfer (BOOT) Sidi Krir power project, near Alexandria, after completing in mid-May the purchase of 39% of the company held by Italy’s Edison International (link here) and a number of smaller investors.
The move comes six months after Globeleq acquired a 61% stake in the 683-MW plant from InterGen (link here), a joint venture between the Royal Dutch Shell Group (AmCham Member) (link here) and the US’ Bechtel (link here). Globeleq says all existing third-party long-term maintenance contracts, fuel agreements and offtake arrangements and electricity supply deals for the plant remain in place. Gas is supplied by the state-owned Egyptian National Gas Company (EGAS) (link here) while Egyptian Electricity Holding Company (EEHC) (link here) is the electricity offtaker.
The local Municipality of Giza City, Giza Governorate, issued on May 20, 2005 a request of offers from contractors Federation under grade A for potable water stations & networks for implementing a project to improve pure drinking water supply at North Pyramids area. The specification fee is LE 2,000. The Bid Bond is LE 500,000. Deadline for the submission of offers is June 12, 2005.
The Mechanical & Electrical Department of the Ministry of Water Resources & irrigation, issued on May 16, 2005 a request of international offers from eligible bidders according to World Bank guidelines for the supply of spare parts of irrigation pumping stations in (a) Tarouga, El Atf El Gedida, El Dashoudi & Ebis El Gedida supplied by Ganz Co. of Hungary, also (b) Al Hares Station supplied by Hitachi of Japan. The specification fee is LE 1,000 each. The Bid Bond in Euro 33,000 & 22,000. Deadline for the submission of offers is June 6, 2005.
Information Technology
The Finance & Administration Department of the Ministry of Communications & Information Technology issued on May 28, 2005 a request of offers for supply, erection, commissioning, training & guarantee of communication and information networks equipment, including related security equipment at home & abroad in favor of the Ministry of Foreign Affairs & its representation agencies including switches, routers, IP telephony, security & management systems. The specification fee is LE2,000. The Bid Bond is LE100,000. Deadline for the submission of offers is June 29, 2005.
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