USAID EXTENDS GRANT TO IMPLEMENT WATER PROJECT Source: ANSAmed, September 28, 2007
The U.S. Agency for International Development (USAID) (link here) has recently announced plans to extend a $10.68 million grant to carry out a project of integrated management of water resources in Egypt’s eastern Delta. The Egyptian Water and Irrigation Minister estimated the project’s coverage to include nine public water directorates serving around 105,000,000 square meters. The project will target improvements in the management and distribution of water resources in the area.
APPAREL EXPORTS TO U.S. EXPECTED TO INCREASE Source: Al Alam al Yom, EFG-Hermes, September 18, 2007
Egypt’s apparel exports to the U.S., driven by the QIZ agreement, are expected to increase further in 2007 after having increased 41% in 2006. Egypt’s El Nasr for Clothing and Textiles (KABO) (Amcham Member) (link here) will focus on further developing its products, improving quality and increasing production. Under the Qualifying Industrial Zone (QIZ) (link here) protocol that Egypt signed with the U.S. in 2004, Egypt is allowed to export textile and apparel goods produced in the nation’s designated QIZs to the U.S. without paying import duties provided it has a specified percentage of Israeli inputs. QIZ and Egypt’s trade agreements with the EU have given Egyptian textile companies a short-term opportunity to boost national exports.
In related QIZ news, several major apparel and dried fruit producers in the Upper Egyptian governorates of Al-Minya, Beni Suef, Assiut, Sohag and Qena have recently asked to join the Qualifying Industrial Zones (QIZ) protocol.
WORLD BANK REPORT LISTS EGYPT AS “TOP REFORMER” Source: Reuters, China Daily, al Bawaba, September 27, 2007
According to the World Bank and the International Finance Corporation’s fifth-annual Doing Business 2008 (link here) Report, Egypt tops the list of reformers making it easier to do business and implementing effective economic reforms over the 2006/07 year.
Egypt’s achievements were noted in five major areas including a reduction of bureaucratic measures hindering the issuance of building licenses; the establishment of a number of service centers geared toward businessmen, investors, exporters and importers at Egyptian ports; streamlining the procedures for starting a business by slashing the minimum capital requirement from EGP 50,000 to EGP 1,000 and cutting start-uptime and costs in half and reducing property registration procedures from 3% the property value to a set fee of EGP 2,000.
Other notable reforms included the application of new title registration fees, causing revenues from title registrations to jump 39% within 6 months, and the opening of one-stop shops for commercial services at Egyptian ports which have cut import time by 7 days and export time by 5 days.
GOVERNMENT IMPOSES EXPORT TARIFF ON RICE Source: Al Ahram, EFG-Hermes, September 19, 2007
The Ministry of Trade and Industry (MTI) (link here) has recently imposed an EGP 200 per ton export tariff on rice, expected to remain for a one-year period. The tariff is designed to ensure the availability of rice in the domestic market at a time of rising rice prices in the international markets.
TE DATA ADSL SUBSCRIBERS RESPOND TO LOST-COST SERVICE Source: Al Alam al Yom, EFG-Hermes, September 17, 2007
The number of ADSL subscribers at TE Data (Amcham Member) (link here), the internet subsidiary of Telecom Egypt, has risen some 60-70% since it began offering a monthly EGP 45 subscription fee for its 256 kilobyte per second service. An approximate 30% of new subscribers prefer the new low-price service. At the beginning of September, all of Egypt ADSL providers began offering a EGP 45 service that limits the amount of kilobytes a subscribers can receive each month.
NOKIA OPENS OFFICE IN EGYPT Source: Arabian Business.com, September 25, 2007
Mobile phone giant Nokia has opened its first office in Egypt to serve the North East Africa region. Located in Cairo, the office will manage operational functions in Egypt, Libya and the Sudan. The new office comes shortly after Nokia opened its regional headquarters in Dubai.
SMART VILLAGES TO HOST CALL CENTERS AND FINANCIAL SERVICES Source: The Daily Star, September 27, 2007
The government has recently announced plans to establish a new Smart Village in Maadi, which will specialize in call center services operated by domestic and international companies.
The 75-feddan project is expected to provide thousands with job opportunities in a variety of sectors and industries.
Egypt’s existing Smart Village (Amcham Member) (link here) will soon also be the site of a new financial services center as the result of a cooperative agreement between the Information Technology Industry Development Agency (ITIDA) and an unnamed international financial institution. The financial services center, holding an estimated value of EGP 195 million and expected to generate some 400 job opportunities during the first phase, will offer its services to a wider Middle East and Gulf audience.
GOE SIGNS THREE EXPLORATION AGREEMENTS FOR NATURAL GAS Source: Al Ahram, EFG-Hermes, September 19, 2007
The government of Egypt (GOE) has signed three new concession agreements for the exploration of natural gas in the Mediterranean and Sinai. The agreements, which represent a total of investment of $193 million, were signed with five international companies from Italy, Chile, Thailand, and the United Kingdom.
RUSSIA’S NOVATEK ACQUIRES 50% OF OFFSHORE GAS FIELD Source: New Kerala.com, Google News, September 29, 2007
Novatek, Russia’s second largest gas producer after Gazprom, has recently acquired 50% interest in a concession agreement from Egypt’s state-owned Thawra Petroleum SAE for gas and oil exploration in the 2,300 square meter offshore block off the Mediterranean coast near El-Arish. The deal marks Novatek’s first endeavor overseas. Thawra Petroleum will retain the remaining 50% interest.
The block’s depth runs from 50 meters in some parts to some 500 meters in others.
According to the agreement, Novatek will gain exploration rights for 4 years, with an option to prolong its operations for an additional 9 years at the end of the initial contract. The exploration period is expected to include geophysical studies of the block and the drilling of two wells. The contract also stipulates a 20-year development period for all commercial discoveries, each entitled to a 5-year extension.
PTTEP SIGNS CONCESSION AGREEMENTS IN EGYPT Source: Oil Voice.com, September 26, 2007
PTT Exploration and Production Public Company Limited (PTTEP) of Thailand and several of its joint venture partners have recently signed concession agreements with the Government of Egypt (GOE) for 2 exploration blocks: the Rommana Block and the Sidi Abd El Rahman Offshore Block. The blocks represent PTTEP’s first activity in Egypt.
The blocks were part of 12 blocks offered in the EGAS International 2006 Bid Round organized by the Egyptian Natural Gas Holding Company (EGAS) (link here) .
The Rommana Block, which has good potential of natural gas and condensate, covers an area of 6,184 square kilometers, situated onshore in the Sinai peninsula. PTTEP will explore the Rommana block with the help of Sipetrol International S.A. with 40% interest and Centrica Resources Limited, a subsidiary of Centrica, with 30% interest. PTTEP holds the remaining 30% interest.
The Sidi Abd El Rahman Offshore Block, holding considerable crude oil potential, covers an area of 4,294 square kilometers situated in the Mediterranean Sea. Edison International SpA operates with 40% interest, while PTTEP and Sipetrol International S.A. each hold 30% interest.
In 2008, PTTEP will begin a 3D seismic survey of the land. Well drilling is expected to begin in 2009.
NEW 750 MEGAWATT POWER PLANT NEARS Source: Al Akhbar, EFG-Hermes, September 17, 2007
The Egyptian government has began building a new 750 megawatt power station at Koraymat, 200 kilometers south of Cairo—a project valued at some EGP 2.4 billion and funded jointly by both local and international investors. The Koraymat 3 power plant will be built alongside two existing plants, the Koraymat 1 and 2. Koraymat, also the site of a 150 megawatt solar energy plant, is expected to become the main source of Egypt's electricity by 2009. The project is designed to generate up to a third more energy without extra fuel.
GOE ALLOCATES EGP 9.9 BILLION TO NEW POWER PLANTS Source: Al Alam al Yom, EFG-Hermes, September 19, 2007
The government of Egypt (GOE) has recently allocated EGP 9.9 billion to construct three power plants at Sidi Kerir and West Cairo. The power plants, expected to come on stream in 2010, will generate an additional 2,200 megawatts for the national power grid. Funding for the project comes from Arab loans, international sponsors, and National Bank of Egypt (NBE) (Amcham Member) (link here).
A 1,500 megawatt plant in North Cairo, worth EGP 3.8 billion, will be linked to the national electricity network starting in October 2007.
BIDDING PROCESS FOR CEMENT AND STEEL LICENSES UPS INVESTMENT Source: Al Alam al Yom, EFG-Hermes, September 20, 2007
The Ministry of Trade and Industry (MTI) has recently awarded 14 new cement plants and 4 new steel plants licenses through a bidding process, which the MTI expects will limit acquisitions and allow for more competition in the sector, eventually leading to price stability in the Egyptian market.
Egypt’s current level of cement production is sufficient to meet increasing construction needs over the next 3-4 years, and the new licenses are expected to help meet growth beyond 2011.
17 NEW COMPANIES ESTABLISHED IN UPPER EGYPT Source: Al Alam al Yom, EFG-Hermes, September 20, 2007
17 newly established companies from the governorates of Al-Minya, Beni Suef, Assiut and Qena have registered with Egypt’s Industrial Development Authority (IDA), a move enabling the companies to qualify for investment incentives.
The new firms are expected to invest some EGP 664.5 million and create 18,860 new jobs. The government has set up an EGP 1 billion fund earmarked to help these and other companies in the region to set up 150 factories. The fund has already distributed EGP 100 million.
WORLD BANK TO SUPPORT ALEXANDRIA DEVELOPMENT PROJECT Source: Al Bawaba, September 19, 2007
The World Bank has recently approved plans to finance $100 million toward the Alexandria Development Project, a project expected to support local development in Alexandria by removing key infrastructural constraints, reducing barriers to investment, and ensuring the socioeconomic integration of the poor.
The project will target three goals: (1) the creation of at least 40,000 jobs each year, (2) the upgrading of 30 squatter settlements where 1/3 of the population lives with limited access to infrastructure and municipal services and 15% to 20% unemployment, and (3) the development of a strategy to combat pollution in Lake Marriout due to the discharge of untreated and primary treated sewage and industrial waste.
EGYPT’S FLOUR SUPPLY GETS FORTIFIED WITH IRON AND FOLIC ACID Source: Reuters, September 26, 2007
The World Food Program in Egypt will soon begin working with the Egyptian government and the nation’s public bakeries to fortify wheat flour supplies used to make subsidized bread with iron and folic acid as part of a nation-wide effort to cut widespread anemia.
The first phase of the fortification project is scheduled to begin in January 2008.
The $23 million project will be phased in gradually over several years and is expected to substantially reduce anemia, which currently effects some 60% of the population as well as maternal and infant problems resulting from a deficiency of folic acid. The Egyptian government will allocate some $20 million to the project over the next five-years, while WFP contributes the remaining $3 million.
ABU DHABI SEEKS CONSULTANCY FOR EGYPT PROJECT Source: MENAFN.com, September 26, 2007
The Department of Municipal Affairs at Abu Dhabi has recently issued public tenders seeking consultancy services for the planning, design and construction supervision of the planned Shaikh Khalifa Bin Zayed Al Nahyan City in Cairo.
The project is set to include a wide range of establishments including residential apartments, and community facilities such as mosques, schools, shops, health clinics and a municipal garden.
Consultants will also assist in the planning and construction of an infrastructure network for water, electricity, telephone, agriculture, sewage and surface drainage as well as roads, pavements and landscaping.
Pre-qualification documents are to be addressed to the general manager of the Abu Dhabi municipality and submitted no later than October 7, 2007.
PORT SAID TERMINAL DOUBLES CAPACITY Source: AFX Limited, September 20, 2007
AP Moller-Maersk AS, holder of 60% interest in the Suez Canal Container Terminal (SCCT), has signed a concession agreement with the Egyptian government for phase 2 of the East Port Said terminal development.
Phase 2 development will double the SCCT annual capacity from 2.55 million twenty ton-equivalent units (TEUs) to 5.1 million TEUs by 2011.
CENTAMIN SEES GOLD PRODUCTION FROM SUKARI PROJECT IN Q4 2008 Source: Forbes, September 28, 2007
Mineral exploration and development company, Centamin Egypt Ltd. (link here), said its Sukari Gold Project in the Eastern Desert is at an advanced stage of development and expects gold production to commence during the fourth quarter of 2008.
The Sukari Gold Project will be Egypt’s first large-scale modern gold mine.
Centamin sources have approximated the project’s known gold reserves at some 6.84 million ounces and an additional 3.6 million ounces of speculative reserves.
Compiled by: Business Studies & Analysis Center E-mail: Studies@amcham.org.eg If you want to receive this bulletin on a regular basis, fill out this form
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