Egypt and U.S. Sign Memorandum of Understanding Source: Mena News Agency, March 20, 2005
Egyptian Minister of State for International Cooperation Fayza Aboulnaga signed with the American side a memorandum of understanding on offering financial aid to Egypt worth $900 million as part of US aid to Egypt during 2005-2008.
The sum falls within the framework of the US economic aid program to Egypt, with $100 million available at the signing ceremony. The US aid comes in appreciation of Egypt's efforts to maintain the various reform programs. The World Bank (link here), the European Union (link here) and the United States, in particular, have shown readiness to promote such an ambitious program through offering financial and technical expertise.
The Egyptian government had adopted a financial reform program that included an integrated system of policies aimed at raising the country's potentials and competitiveness in this respect within the context of the state's general plan for economic and social development.
Egypt Lifts Ban on U.S. Beef Products Source: US Fed News, March 23, 2005
The U.S. Department of Agriculture's Foreign Agricultural Service (link here) has announced that Egypt is resuming imports of U.S. beef and beef products from animals less than 30 months of age.
The agreement requires age and origin requirements under a USDA Agricultural Marketing Service Beef Export Verification (BEV) program. In 2003, Egyptian purchases of U.S. beef and beef products amounted to $30 million, with liver accounting for nearly 65% or $19 million of total sales.
U.S. Remains Principle Source of Egypt’s Wheat Imports Source: Al Sharq Al Awsat, March 23, 2005
Egypt’s wheat imports from the U.S. dropped 15.2% to 6.1 million tons last year from 7.2 million tons in 2003, according to Dr. Hassan Khedr, Minister of Supply and Internal Trade.
Egyptians consume about 13.5 million tons of wheat every year, but local production of the crop stand at 5.5 million tons and the country has to import wheat from overseas markets to offset the shortage.
Recently, the government has launched a new plan to diversify wheat imports to reduce its dependence on the US market. In 2004, the government signed import contracts with Ukraine, Russia, Australia, Canada and Syria to provide Egypt with 3 million tons of wheat.
However, the Minister pointed that the US remained the principle source of Egyptian wheat imports and he added that he discussed with the American Wheat Council members the possibilities for financial facilities for wheat imports from the US.
The US administration has earlier offered to provide facilitated loans for wheat importers from the Egyptian private sector. USAID Egypt (link here) has provided about $17.2 million to finance a restructuring plan for Egyptian mills and silos on condition that they continue importing wheat from the US.
USAID Egypt to Draw Expertise from Turkey on Credit Bureau Source: NOOZZ, March 16, 2005
A team from the Central Bank of Egypt (link here) and other government agencies are poised to fly to Turkey by beginning of April for a meeting with officials from the Turkish financial regulatory authorities. The team will attend training courses and reassessments of Turkey’s experience on launching credit bureaus providing related credit information on bank clients.
The Turkish experience is the recent most successful initiative in this field with a business environment that largely resembles environment in Egypt.
USAID Egypt (link here) is implementing a $35 million plan to revamp Egypt’s financial system over the coming 5 years. Launching a credit bureau is one of four pillars of the USAID Egypt initiative.
The USAID official stressed the need for such a bureau to help local banks and other financial institutions by providing information on clients’ credit history, which will expand consumer, and mortgage loans by reducing credit risk for lenders.
Several banks and financial companies in Egypt are set to found a new credit bureau. The initiative comes as the CBE investigates a proposal to amend laws regulating the Egyptian banking system, including regulations for credit bureaus operation under CBE supervision.
For further information on Egypt-U.S. Relations (Click here)
For AmCham’s latest research on textiles and clothing (Click here)
For latest information on Rebuilding Iraq (Click here)
Egypt and Italy Sign Food and Furniture Agreements Source: Global News Wire, March 21, 2005
Egyptian Minister of International Cooperation Fayza Aboulnaga had signed an agreement on joint cooperation with Italian Ambassador Antonio Badini, on March 21, known as “The Green Corridor”.
According to the agreement, Egypt would export horticultural products to Europe via Italy. Moreover, Italy will contribute to the financing of transportation, cooling and storage facilities. Italy’s contribution to the project will be through channeling part of Egyptian debts to Rome into development projects in Egypt.
Furthermore, Egypt and Italy signed on March 22 a contract to build the first technological center to develop the furniture industry in Egypt. The center to be funded by the European Union (EU) (link here) aims at developing the furniture industry and increasing its competitive capabilities. The center would be built in the 10th of Ramadan City, adding that other similar centers would be set up later in Damietta, Alexandria and Giza governorates.
Customs Authority Upgrades Clearance Zones Source: NOOZZ, March 26, 2005
The Egyptian Customs Authority (link here) has upgraded the Ouga customs clearance zone on the Israeli-Egyptian border to facilitate imports of production inputs from Israel under the Qualified Industrial Zones Agreement (link here).
The customs authority has automated procedures at the Ouga clearance zone and will upgrade two more zones in Port Said and Damietta to facilitate imports of Israeli components.
The tripartite agreement signed last December between Egypt, Israel and the United States, allows Egyptian exports from 7 qualified industrial zones to enter the US markets duty-free provided they contain 11.7% Israeli component.
Earlier this week, 397 Egyptian companies started shipping goods to the US under the QIZ agreement. Government officials and private sector in Egypt hope the agreement will help boost the country's exports to the US, Egypt's second largest trade partner after the European Union.
EHCCI Set to Sell Four Subsidiaries Source: NOOZZ, March 20, 2005
The Egyptian Holding Company for Chemical Industries (EHCCI) is poised to offer government stakes in several subsidiaries to local and international investors, showing interest in the company’s holdings.
The companies include Delta Fertilizers, the National Cement Company and Egypt for Chemical industries.
The EHCCI is currently conducting an assessment of each of the subsidiaries’ financials to determine their market fair prices before offering them to investors in the coming weeks.
The EHCCI controls 100% of Delta Fertilizers. Though the cabinet had in January 2004 passed a decision for continued government ownership of Delta, the company would be offered for sale once an approval from concerned authorities was issued.
Egypt for Chemical Industries is 53% owned by the EHCCI, and the remaining portion is represented in free-floating shares in the Egyptian stock market.
The EHCCI plans to privatize subsidiaries was developed to seize an opportunity of improved business climate with higher foreign capital inflows. The holding company will announce soon more selling initiatives for its subsidiaries.
S&P Lifts Egypt’s Outlook to Stable Source: Reuters, March 15, 2005
Standard & Poor's (link here) revised upward its credit rating for Egypt to stable from negative citing improvements in external liquidity and a reinvigorated reform program.
S&P also affirmed its 'BB+' long-term and 'B' short-term foreign currency and its 'BBB-' long-term and 'A-3' short-term local currency ratings on Egypt.
The outlook revision reflects the improvements in external liquidity, underpinned by a reinvigorated program of structural reforms, and concomitant strengthening of Egypt's external balance sheet, which lower the external risks emanating from a widening budget deficit and burgeoning government debt burden.
Intel Signs Long-term Cooperation with Egyptian Government Source: Al Ahram, March 29, 2005
The Egyptian government has signed a long-term cooperation agreement with the giant US chipmaker, Intel Corp (AmCham Member) (link here), which will set up a regional center in Egypt for designing and developing Intel products.
Prime Minister Ahmad Nazif attended the signature of the agreement on Monday between Craig Barret, chairman of Intel, and Tarek Kamel, Egypt's Minister of Communication & Information Technology.
Intel's new center in Egypt will be the company's fourth development and design center worldwide. The company's other centers include one in India, in the US and in Europe.
Intel has yet to disclose the amount of investments it plans to pump in the center, which will provide technical support, and marketing services software developers in the Europe, Africa and the Arab countries.
Barret said the center would significantly benefit from the pool of human skills and government support for communication and IT industry in Egypt.
Intel's agreement with the Egyptian government also includes the company's educational initiative, Intel-Learn, which aims to integrate the information technology into the Egyptian education system. The company will provide training services through IT clubs throughout Egypt.
The company will also cooperate with the MCIT (link here) to increase the computer penetration in Egypt through the government's initiative of computer for every household.
A recent report from the MCIT shows a remarkable increase in the number of international IT companies setting up their technical support centers in Egypt over the first two months of 2005. The number of these companies rose from 1224 in December last year to 1268 companies at the end of February 2005.
Inmarsat of Russia to Launch Satellite Communication Services in Egypt Source: NOOZZ, March 22, 2005
Russia’s Inmarsat Satellite Company (link here) will announce its newly obtained license to launch the company’s satellite service in Egypt. Egypt’s National Telecom Regulatory Authority (link here) accepted Inmarsat’s proposal for launching the new satellite service last January.
The company is expected to launch its new satellite 1-4 to provide broadband information service, which is compatible with G3 mobile phone networks, allowing it to provide voice and data transfer services through mobile phones.
Inmarsat had in mid-last year launched a pilot scheme to link the Automatic Teller Machines of the Egyptian Commercial Bank (AmCham Member) (link here) through satellite network. The scheme aimed at providing ATM services to new urban and industrial communities, which lacked adequate infrastructure for communication services. The company has also linked one of the bank’s branches in Alexandria to another in Cairo through satellite networking.
The company’s initiative coincides with announcements by Newskies Satellites (link here) of Netherlands, Arabsat (link here), and France’s Eutelsat (link here) of plans for expansions in the Egyptian market.
Egypt’s Ambitious Liberalization Plan Source: Middle East Economic Digest, March 18, 2005
Cairo is preparing to privatize state-owned Banque Misr (AmCham Member) (link here) as part of its reform program.
The sale would follow those of first Bank of Alexandria (AmCham Member) (link here) and then Banque du Caire (AmCham Member) (link here), which are planned before year-end. Government stakes in at least two joint venture banks will also be sold in 2005. The sale of Banque Misr would be through an initial public offering (IPO).
Other companies to be sold in 2005 would include fixed-line operator Telecom Egypt (TE) (link here) and one of the three main public insurance companies. Moreover, three companies would be sold in the energy sector. International investors would be offered the opportunity to invest in infrastructure through build-operate-transfer (BOT) schemes and independent power projects (IPPs).
Government to Launch Zero Coupon Bonds Source: NOOZZ, March 29, 2005
The Egyptian Ministry of Finance plans to issue zero coupon bonds under the primary dealers arrangement, which the government may use as a tool to repay debts of state-owned companies.
According to data form the Central Bank of Egypt (link here), accumulated debts of state-owned companies mounted to LE32 billion ($5.5 billion) at the end of last year. The companies have failed to repay these debts because of weak profitability.
The Ministry of Finance had earlier announced its plan to issue zero-coupon bonds for the first time in Egypt in order to complete the benchmark skeleton for bonds in Egypt. If the cabinet approves the issue, revenues of zero-coupon bonds will be used to repay debts of state-owned companies.
The bonds will be guaranteed by the treasury rather than holding companies as collaterals, which would guarantee sound credit rating for indebted companies.
French Finally Complete Suez takeover Source: Middle East Economic Digest, March 25, 2005
Ciments Francais (CF)- a subsidiary of Italy’s Italcementi Group (link here)- and a consortium of local and regional investors have taken a controlling stake in Suez Cement Company (SCC) (AmCham Member) (link here), Egypt’s biggest cement producer.
The consortium in mid- March acquired a 33.4% stake in the company, taking its total shareholding to about 54.2%. The purchase is in line with CF’s strategy to increase its production capacity in emerging markets. Suez Cement will be fully consolidated into CF from the second quarter. CF has committed to modernizing and expanding production and management systems at Suez Cement and its subsidiary Torah Portland Cement.
For Amcham’s Proceedings of the Conference on the “Reform of the Egyptian Financial Sector” (Click here)New
First Solar Energy Station Project To Go Ahead Source: Al Hayat, March 20, 2005
Japan Bank for International Cooperation (link here) agreed to finance the execution of the first solar electricity generation station in Egypt through a $93 million soft loan.
The new power station will be located in the compound of the existing El Kureimat Steam Power Station. The Japanese Bank agreed to finance the project after evaluating the relevant reports and studies, which assures the project success.
ECHEM Holds Talks With Contractors on Alex LAB Source: Middle East Economic Digest, March 18, 2005
Egyptian Petrochemicals Holding Company (ECHEM) (Amcham Member) (link here) is in talks with three international contractors – Canada’s SNC Lavalin (link here), South Korea’s LG Engineering & Construction (link here) and Paris-based Technip (link here)– on the development of its estimated $200 million-300 million linear alkyl benzene (LAB) scheme near Alexandria.
The state-owned firm is considering the financial and technology proposals put forward by the three, and is expected to make a final decision before the end of the second quarter.
The successful contractor will work alongside Engineering for the Petroleum & Process Industries (Enppi) (Amcham Member) (link here) and Petrojet (Amcham Member) (link here), both local, during the engineering, procurement and construction (EPC) phase of the project, which envisages the construction of a plant with LAB capacity of up to 100,000 tons a year (t/y).
In March last year, Egyptian LAB (ELAB) –the project company set up to oversee the facility’s implementation – awarded the project management contract to the US’ Fluor Corporation (link here). The US’ UOP (link here) is the technology license provider, while Enppi is carrying out front-end engineering and design (FEED) work. Offtake agreements have been signed with the local Port Said Detergent & Chemical Industries and German chemicals distributor Helm (link here).
The scheme is one of ECHEM’s eight main projects in the first phase of its 20-year master plan, which should see $2,000 million of foreign direct investment in the sector.
The other major schemes include a 160,000-t/y polypropylene plant, a 1.7 million-t/y methanol plant and a 1 million-t/y ethylene/polyethylene complex, a joint venture agreement for which is expected to be signed soon.
Saudi Binladen Starts Work on Sharm Airport Source: Middle East Economic Digest, March 25, 2005
The Saudi Binladen Group (link here) has won the $65 million estimated contract to implement an airport project in Egypt financed by the World Bank (link here).
The Group, whose chairman is Bakr Binladen, will construct a new passenger lounge for the Sharm El Sheikh airport in Egypt. In addition to the 44,000-sq.m. lounge, including six gates for international arrivals and departures, gate for domestic flights, the project includes an air traffic observation building and other related facilities.
The project is expected to be completed in mid-2006. The expanded airport will be capable of handling 2,500 passengers an hour. The project manager is Beirut-based Dar al-Handasah (Shair & Partners) (AmCham Member) (link here). The client is the Civil Aviation Authority.
The World Bank has approved loans worth $335 million to finance the development projects for Cairo and Sharm El Sheikh airports.
Binladen has already completed the renovation of Aden International Airport, adding that World Bank financed the project.
Binladin Group has also won the contract to implement the Sharjah International Airport expansion project.
Hutchison to Develop Alexandria, Dakahliya Source: Middle East Economic Digest, March 25, 2005
Hong Kong-based Hutchison Port Holdings (HPH) (link here) has signed contracts to develop and manage Dakahliya and Alexandria container terminals in co-operation with Alexandria Port Authority.
HPH plans to convert the two cargo ports into modern container terminals. Both ports will have alongside depths of 12 meters with quay wall lengths of 380 meters at Alexandria and 560 meters at Dakahliya. The duration of the contracts is 25 years. The development follows the recent signing of a memorandum of understanding between Kuwait & Gulf Link Transport Company and Damietta Port Authority to expand the container terminal at Damietta
French Alstom Wins $49 Million Contract Source: Al Sharq Al Awsat, March 20, 2005
The French Giant Alstom Power Company (link here) won a $49 million to install steam turbines at the Talkha power plant, located approximately 150 kilometers north of Cairo.
Several international companies, including Mitsubishi (link here), Siemens (link here) and Ansaldo (link here), had bid for this contract, which was won by Alstom. Alstom offers a comprehensive capability, possessing the broadest scope of power generation systems, equipment and services in the industry.
Energy Concessions Submitted to Parliament Source: Reuters, March 22, 2005
The Ministry of Petroleum (link here) announced that it had submitted on March 22 six oil and gas concession agreements to be ratified by the parliament with foreign energy firms from Italy, Germany, Canada and Britain. The ministry had also submitted amendments to four existing concession agreements.
The 10 agreements cover an area of 18,200 sq km and include commitments to spend $911.25 million to drill 42 wells. The signature bonuses, or fees paid for signing the deal, were worth a total of $35 million.
The approval from the lower house of parliament is the final stage to ratify the new concession agreements or amendments.
The ministry listed the six new concession agreements as:
-West Kalabsha in the Western Desert with IEOC, an affiliate of Italy's ENI (link here), Germany's RWE Dea (AmCham Member) (link here) and state-owned Egyptian General Petroleum Corp (EGPC) (link here).
- West Wadi Rayyan in the Western Desert with Italy's Edison (AmCham Member) (link here) and EGPC (link here).
- West Manzala in the Nile Delta with firms including Canada's Centurion Energy (link here), state-owned Egyptian Natural Gas Holding Company (EGAS) (link here) and an Italian firm.
- West Qantara in the Nile Delta with EGAS (link here) and an Italian firm.
- Offshore North al-Burg in the Mediterranean with Britain's BP (AmCham Member) (link here), IEOC and EGAS (link here) .
- Offshore Brolos in the Mediterranean with BP (AmCham Member) (link here) and EGAS (link here).
Gazprom and EGAS Sign Memorandum of Understanding Source: Prime-Tass, March 28, 2005
CEO of Russian natural gas monopoly Gazprom (GAZP) (link here) Alexei Miller and Chairman of the Egyptian Natural Gas Holding Company (EGAS) (link here) Mohamed Tawila signed a Memorandum of Understanding (MOU) on March 27.
The memorandum determines the key areas for cooperation between Gazprom and EGAS, namely geological exploration, oil and gas production, construction of new domestic and export pipelines, the supply of Russian equipment for the oil and gas industry to Egypt, and the training of Egyptian personnel in Russia. The memorandum also envisages cooperation in the production of liquefied natural gas.
Within a week a special Russian-Egyptian working group will be created, which is to draw up definite projects for cooperation in the natural gas sector by the end of April.
In addition, Egypt is involved in the "Arabian pipeline" project, which includes transporting Egyptian gas to Europe. According to Miller, "Egypt won't be competing with Russia, as Egyptian gas is exported to those European countries that Russia does not export its gas to”.
Miller held talks with Egypt's Prime Minister Ahmed Nazif and Petroleum Minister Sameh Fahmy. The talks focused on Gazprom's participation in oil and gas production, transportation, refining and sales in Egypt, as well as in the production of liquefied natural gas. Resumption of the construction of an underwater pipeline from the Sinai Peninsula to Israel was also discussed at the meeting.
EGAS manages Egypt's natural gas industry. Egypt has 1.76 trillion cubic meters of proven natural gas reserves and in this respect ranks third after Nigeria and Algeria on the African continent.
The Ministry of Water Resources and Irrigation, the mechanical and electrical department, issued on March 22,2005 a request of international offers from companies of member countries of the World Bank through their local agents for the replacement of the electromechanical equipment at (a) Al Hebeil irrigation pumping station of 45 degrees inclination comprising 3 pumps of 1m3/second discharge at 1.4 meters lift & (b) Al Gharira irrigation pumping station of 45 degrees inclination comprising 4 pumps of 1m3/second discharge at 1.8 meters lift. The specification fee is LE 1,000 each. Deadline for the submission of offers is May 30, 2005.
Water and Waste Water
Arab Contractors, Osman A Osman & Co. (ARABCO), the transport projects Division, issued on March 24, 2005 a request for design and implementing of (a) a sanitary drainage sloping line of 1,500 mm. final internal diameter by means of pipe jacking technique to serve Dar Al Salam Island branch deriving from Maadi Rock Tunnel, also (b) another similar sloping line but of 2,500 mm. final internal diameter after lining by means of segments technique to serve Dar Al Salam district branch, also driving from Maadi Rock Tunnel. The specification fees are LE 15,000 & 10,000. The Bid Bonds are LE 800,000 & 300,000. The performance bond is 5% each. Deadlines for the submission of offers are April 26 & 27,2005.
Medical Equipment
The Central Purchases Department of Assuit University issued on March 19, 2005 a request of (a) medical instruments for the Nose & Ear div., (b) medical instruments & installations for the Female Health Hospital & Liver Treatment Unit, (c) medical instruments for the Liver Surgery Unit (d) precision instruments for Ear & Brain Surgery. The specification fees are LE 50 & 100 & 100 & 50. The Bid Bonds are LE 3,000 & 6,500 & 6,000 & 2,200. Deadlines for submission of offers is April 9, 2005.
Printable version
