US Directs Aid to Egypt for Governance & Education Source: U.S. House of Representatives, June 23, 2005
A House of Representatives committee has voted to direct part of U.S. economic aid to Egypt specifically for improving governance and basic education. In a voice vote June 21, the House Appropriations Committee (link here) approved an amendment that would earmark $50 million for governance and $50 million for basic education from the total $535 million of economic assistance the foreign operations spending bill would provide Egypt in the fiscal year beginning October 1 (FY06).
The committee later approved the entire FY06 spending bill for consideration by the entire House. To become law, a final version of a spending bill has to be passed by the House and Senate and signed by the president.
The Senate Appropriations Committee is scheduled to consider its version June 30. During the House committee's consideration a member withdrew a proposed amendment opposed by Republican leaders that would have transferred $40 million to economic assistance for Egypt from the $1.3 billion in military assistance for that country.
The level of military and economic spending approved by the committee for Egypt matches the request from the Bush administration.
Agreements to Attract US Companies to Invest in Egypt Source: The Egyptian State Information Service, June 25, 2005
Egypt’s Minister of Communications and Information Technology (CIT), in a visit to the U.S, has reached an agreement through his talks with US officials and congressmen as well as CEOs of large American specialized companies, on the establishment of a partnership between Egyptian and US companies.
Under the agreement, the US companies will provide experience and support to boost manufacturing of some equipment in the domain of communications in addition to enhancing the local industries to provide the necessary need in this domain.
The minister said that his meetings with the businessmen and IT experts in the US included a review of the Egyptian government's recent achievements in the field of economy in terms of higher growth rates, stable exchange rates and more foreign investments. The agreement aims at helping the Egyptian telecommunications authority (link here) in terms of investments, construction and operation and drawing up the specifications of the 3rd network of mobile phones in Egypt. Moreover, Dr. Tarek Kamel also met with representatives from the leading technology companies in the region at a reception hosted by the Northern Virginia Technology Council (link here) on Tuesday, June 21st, to announce a number of large foreign investment opportunities.
Among these are contracts for plans to build the largest post office outlet network in the Middle East and Africa, contracts to oversee the operations for Egypt Post (link here) , and contracts for e-payment services in Egypt. Other equally promising investment opportunities will also be announced in the future.
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Privatization Progressing Source: Business Monitor International, June 23, 2005
Egyptian Investment Minister, Dr. Mahmoud Mohieldin has stated that progress is being made on the privatization of the two key state-owned firms, Bank of Alexandria (AmCham Member) (link here) and Telecom Egypt (link here). Investment banks were currently being chosen to handle the two deals, and the name of the successful candidates would be announced 'within weeks', he said.
Speaking at a conference in London, Mohieldin also told listeners that Egypt had boosted the stake for sale in state tobacco monopoly Eastern Company (link here) from 35% to 49%, and had decided to float Misr Aluminium, one of the country's most profitable companies.
This encouraging news on the privatization front has sent Egypt's Hermes stock index back up to 42,482.22, after it slipped from its all-time high of 42,657.83 yesterday. Not only does it illustrate the government's commitment to economic reform, it also promises great things in terms of economic growth and FDI.
Mohieldin said that the proceeds of privatization over the year to June 21 totaled roughly $1 billion in gross terms, and said that he expected next year's takings to exceed this figure. He was also upbeat on the prospect of FDI, predicting that inflows would total $1.4-1.5 billion in FY05/06, exclusive of the oil sector, compared with $1 billion in FY04/05.
Suez Canal Records $282 Million in Receipts Last May Source: Arab Press Digest, June 27, 2005
The receipts of the Suez Canal witnessed a significant increase of $25 million to record $282 million by the end of last May, compared to $247 million a year earlier. About 1,466 ships loading 53.8 million tons passed through the canal in May, compared to 1,400 ships loading 51 million tons crossed the canal a year earlier.
By the end of the 11 months of fiscal year 2004/2005, receipts of Egypt's Suez Canal reached its highest record in its history to record $3.1 billion by end of last May, compared to $2.8 billion during the entire year of 2004.
Ahmed Fadel, the president of the Suez Canal Authority (SCA), has attributed the rise in the Suez Canal's receipts to the active trade movement in East Asia, especially India and China. In addition, the rise in fuel prices has encouraged ships to take the shortest routes.
Revenues from the Suez Canal reached $34.4 billion during 30 years since the canal was reopened in 1975 after the 1973 October War. About 53,575 ships have passed through the canal in 30 years with 11.2 billion tons in loads.
Revenues from Suez Canal are Egypt's major foreign currency earners along with revenues from tourism and oil exports, in addition to remittances from Egyptians abroad.
Egypt and EU Sign Cooperation Agreement Source: The Egyptian State Information Service, June 22, 2005
Prime Minister, H.E Dr. Ahmed Nazif attended on June 21, the signing of an EU-Egypt agreement for scientific and technological cooperation. The agreement was co-signed by the European Commissioner for Science and Research Janez Potocnik and Minister for Higher Education and Scientific Research Amr Ezzat Salama.
The agreement on scientific and technological cooperation will boost the scientific cooperation between Egypt and the EU (link here), providing for more structured and focused cooperation through the creation of," joint committee".
It will also offer a solid framework for both parties to continuously explore areas of common interest in science and technology.
The agreement is the first of its kind to be clinched between Egypt and the EU for partnership on scientific research and technology transfer. It would contribute to improving the performance of the Egyptian economy through modernizing various economic sectors via the use of state-of- the-art technologies.
Meanwhile, the European Commissioner for Science and Research Janez Potocnik announced that he would appoint a permanent representative for him in Egypt to follow up the necessary mechanisms for expanding cooperation between the two sides in the fields of science, Knowledge and technology. As member of the European neighborhood space, Egypt is engaged with the EU in a far reaching partnership where scientific research and transfer of knowledge are essential elements.
Egypt is already a significant partner of the EU in the area of scientific and technological cooperation. In 2004, the EU and Egypt jointly opened in Cairo the Galileo Regional Mediterranean Office and the European Satellite Navigation System.
Bank of Piraeus Completes ECB Acquisition Source: Athens News Agency, June 22, 2005
The Bank of Piraeus Group (link here) on Wednesday, June 22, announced the completion of procedures to acquire 69.3% in Egyptian Commercial Bank (ECB) (AmCham Member) (link here), paving the way for the Greek bank's entry in the Egyptian market following completion of a public offer, which began in early June.
Bank of Piraeus acquired the control of Egyptian Commercial Bank paying around 19 million euros, or 20 Egyptian pounds per share. ECB will proceed with a share capital increase plan, worth 47 million euros, by the end of July.
The Egyptian Commercial Bank (ECB) was founded in 1978 in Cairo and operates a branch network of 18 units around the country. The bank plan to raise the number of its network to 25 units this year. It employs 560 people. ECB's assets totalled 437 million euros at the end of December 2004, saving deposits were 400 million euros and net loans 196 million euros. Fitch (link here), the international credit rating agency, has ranked ECB with a credit rating of BB.
Majid Al Fattaim Signs $150 Million Investment Deal in Egypt Source: Mena Report, 26 June, 2005
In a move to strengthen strategic business efforts, Majid Al Futtaim, President of the Majid Al Futtaim Group (link here) of Companies recently announced a new joint investment company, Oasis Capital Egypt, to concentrate on investing in private ventures in Egypt.
Oasis Capital Egypt, worth $150 million, is a joint partnership between Mr. Majid Al Futtaim (30%), Mr. Naguib Sawiris of Orascom Telecom (40%) (link here) and Ms. Lubna Olayan of Olayan Financing Company (30%) (link here). This is the first time that an alliance between three such dominant corporations takes place in Egypt. Targeting investment figures in the range of $25 - $35 million, the forthcoming company will seek majority stake ownership in companies that are located throughout Egypt with the goal of investing in those that have not yet realized their full potential.
“Oasis Capital Egypt is an initiative that reflects on our confidence in the future of the economic development of Egypt,” commented Francois de Mountaudoin, CEO of Majid Al Futtaim Holding. “Our partnership with Orascom Telecom and Olayan Financing Company will create an opportunity for us to increase our competitiveness, fuel further growth in the region, and enable us to continue to enhance our reputation as one of the most successful businesses in the Middle East.”
Oasis Capital Egypt is set to bring the Egyptian economy several new benefits through its provision of capital and expert industry guidance, contributing to the development of different businesses ranging from industrial and manufacturing to consumer goods and textiles. It will work through a local Egyptian management company established for the sole purpose of this venture, with a highly qualified team of managers.
IFC to Invest $3 Million in Egypt Source: IFC, June 21, 2005
The International Finance Corporation (link here) , the private sector arm of the World Bank Group (link here) , recently signed an agreement to invest $3 million for a 20% equity stake in Egypt Factors, a new non-bank financial institution that will provide factoring services for export-oriented businesses in Egypt. Other sponsors are First International Merchant Bank (link here) and Commercial International Bank Egypt S.A.E. (AmCham Member) (link here), each of which is taking a 40% equity share.
IFC’s investment will establish Egypt’s first factoring company and help promote this alternative trade finance product to benefit small and medium enterprises (SMEs) in the country’s dynamic export sector. Export factoring, a new financial service in Egypt, enables exporters to mitigate the financial risks associated with trading on an open account basis.
The company aims to be a “one-stop shop” for Egyptian exporters, including SMEs, and is expected to have a strong positive impact by enhancing the level of credit being made available locally. Drawing on the technical expertise and other strengths of its stakeholders, Egypt Factors will introduce industry best practices in Egypt and provide a model for others to replicate.
Commercial International Bank is the fifth-largest bank in Egypt, primarily serving large private sector enterprises, multinationals, and export oriented companies. While,
First International Merchant Bank, based in Malta, is a provider of trade-related financial services to clients in emerging markets.
World Institutions Enter Egypt's Real Estate Market Source: Arabic News, June 24, 2005
Egypt’s Minister of Investment, Dr. Mahmoud Mohieddin said that an agreement has been reached with two world Financial Institutions specialized in the domain of the real estate finance in Europe and North America to participate in financing real estate in Egypt.
The agreement includes cooperation between the world institutions and some of the Egyptian financial institutions over the coming period, added the minister, asserting the importance of benefiting from the experience specialized in this activity, which is vital and critical for the national economy. They were briefed on the legal and institutional framework of the real estate finance in Egypt as well as the priority given by the government to promote and activate this activity, expounded the minister.
New Appointments in CMA and Ministry of Investment Source: Ministry of Investment, June 28, 2005
Dr. Ahmed Nazif, Prime Minister of Egypt, issued a decree for the appointment of Dr. Hani Sarie Eldin as Chairman of the Capital Market Authority (link here) . Dr. Sarie Eldin holds a PhD in International Commercial Law from the Center of Commercial Law Studies, Queen Mary University of London and works as a professor of commercial law at the Faculty of Law, Cairo University. Dr. Sarie Eldin held several posts and worked as a legal advisor and manager at Al-Futtaim Group of Companies in Dubai. He was also chairman of several affiliated companies of the Group, in addition to supervising the Group's activities in Egypt.
Minister of Investment, Dr. Mahmoud Mohieldin, also issued a decree for the appointment of Mr. Abdel Hamid Ibrahim, ex-Chairman of the Capital Market Authority, as Senior Advisor to the Minister of Investment for Finance Affairs and he will be responsible for following the projects for the Financial Services Center, which will be established at the Smart Village in cooperation with the Ministry of Communications and Information Technology (link here) , the project for the Arab Capital Markets Union, and the activities of the Institute of Directors.
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Vodafone Egypt Enhances Network With New Software Source: Business Monitor International, June 16, 2005
Vodafone Egypt (AmCham Member) (link here), is to use US Software Company, Wireless Valley Communications (link here) SitePlanner and EnterprisePlanner products in its expansion network plans.
To improve and enhance GSM coverage for its customers, Vodafone Egypt will be supplementing its outdoor tower grid with in-building networks in Locations where there is high concentration of use. Vodafone will use Wireless Valley's SitePlanner software to design, implement and manage the in-building networks.
Vodafone Egypt's Radio Planning Management, Mohamed Shalaby said, "using Wireless Valley's products to design and manage our in-building expansion will enable us to streamline and improve our design processes and create networks with optimal coverage."
Wireless Valley's products enable companies to establish a repeatable and scalable process for designing and managing wireless networks. The composition and contents of a building or city such as the wall construction, trees and electronic interferers can have significant impact on wireless signals.
Up until now, the company has carried out manual site survey methods to plan where infrastructure would be placed, resulting in high costs and dropped lines that created a lot of wasted time. The new software will enable the company to optimise its operating costs whilst providing a better level of network coverage through fewer human errors.
The Egyptian mobile market has shown encouraging signs recently, growing by 13% against 7% in the same quarter of 2004. Vodafone Egypt is 50.1%-owned by Vodafone (link here) and 25.5%-owned by Telecom Egypt (link here).
LinkdotNet Signs VoIP Deal Source: Trade Arabia, June 18, 2005
LINKdotNET (AmCham Member) (link here), a leading privately owned Internet service and solutions provider in the Middle East, has become the first company to provide Voice over IP (VoIP) services in Egypt.
An agreement has been signed at the headquarters of the National Telecommunications Regulatory Authority (NTRA) (link here), expanding the class 'A' ISP license granted to LINKdotNET to include providing VoIP services to agencies and corporations using VPN networks. VoIP is truly a revolutionary service due to the many services and advantages it entails for the business sector. This service provides comprehensive communications solutions that enable digital phone communication using VPN networks in Egypt.
NTRA president Dr. Alaa Fahmy and LINKdotNET president and CEO Khaled Bishara signed the deal.
NTRA are currently evaluating the next phase of implementing this service in order to allow Egyptian consumers to use VoIP from home to make international or local calls by the end of this year.
Egypt Sets Up First Company for Exporting Pharmaceuticals Source: Al Alam Al Youm, June 22, 2005
Egypt has established the first Egyptian company for exporting pharmaceutical with the capital of LE20 million.
Mostafa Ibrahim, CEO of the new company Expo Pharma, said that the aim of setting up the company is to export Egyptian medicine to Arab and African countries and some European markets.
The Holding Company for Pharmaceuticals owns a 45% stake in Expo Pharma while the Export Development Bank of Egypt (AmCham Member) owns 10% and an unidentified Saudi investor owns 15% in the new company.
The company would focus on exporting human and veterinary drugs in addition to medical herbs and plants.
Pharmaceutical companies in Egypt have been suffering huge losses recently due to an obligatory pricing system for medicine in the country, which increases their products' prices. Combined with the high costs of production and research and development, firms have no alternative but to absorb these costs in their profit margins.
New Plan to Upgrade Railways Source: Global News Wire, June 22, 2005
The Minister of Transportation unveiled on June 20, a comprehensive plan for developing train services and restructuring the railway sector in association with the private sector. The government has approved the necessary funds for the plan, which involves procuring new locomotives and carriages, as well as upgrading train stations nationwide, Minister Essam Sharaf told a Cairo workshop.
Minister Sharaf stressed that this would not lead to any increases in train fares, because the government is fully committed to not saddling low-income brackets with any extra financial burdens. In addressing the workshop, entitled 'Restructuring the Railway Sector", World Bank (WB) (link here) experts gave their views on upgrading train services in Egypt as well as presenting proposals for restructuring the railway sector and modernizing its management with the help of the private sector.
The railway sector ran up debts of LE3.4 billion between 2000 and 2004 and participants at the workshop attributed the deficit to the fact that the railway sector is being run as a part of the government and not in an economic manner.
Contract to Establish First Firm to Produce Giant Oil Pumps Source: The Egyptian State Information Service, June 16, 2005
A contract to establish an Egyptian-German company to produce heavy-duty oil-pumps according to international specifications was signed on June 15. The contract was signed by the head of the Petroleum Authority, Ibrahim Saleh, and the chairman of Enppi Company (link here) Hani Saleh with Oil Minister Sameh Fahmy and Major General Sief Galal, Suez Governor, attending.
The new company's activities will include producing and maintaining all types of the pumps currently used in Egypt. Moreover, the new company's factory will be the first plant of its kind in the Middle East.
It will be constructed in Suez governorate on a 20-feddan area with the first phase productive capacity of about 400 pumps annually. The Minister revealed that the company would have a capital of six million euros, adding that the overall production would be implemented in four stages, increasing gradually to reach 39% of local production by the end of 2010.
The factory would create in its first phase approximately 180 job opportunities, with this eventually be raised to reach 300 new jobs.
The company is expected to achieve revenues of $20 million annually in addition to saving costs on imported pumps.
EMG Reaches Egyptian/Israeli Gas Agreement Source: Business Monitor International, June 20, 2005
Israeli/Egyptian consortium Eastern Mediterranean Gas (EMG) is to import gas from Egypt to Israel for 20-years after signing an agreement with Egyptian state-owned natural gas firms Egyptian General Petroleum Corporation (EGPC) (link here) and Egyptian Natural Gas Holding (EGAS) (link here).
The deal has been valued at $14-28 billion, reaching the higher figure if the gas is exported to European or Middle Eastern markets. Negotiations are currently underway with Greece and Turkey to market the gas there.
The contract between state-owned Israel Electric Corporation and EMG, which is a joint Israeli-Egyptian venture, will be worth $2.5 billion to Egypt over 15 years, and cements an already fruitful trade relationship between the two countries.
Israel is to sign the long-delayed deal to purchase 1.7 billion cubic meters of Egyptian natural gas per year, on June 30.
Santos to Drill Egypt’s Western Desert Source: Nationwide News Pty Limited, June 28, 2005
Santos Ltd (link here) has been awarded an oil exploration block in Egypt as part of a joint venture with Devon Energy Corporation (link here) and Teikoku Oil Company (link here). The venture is committed to spend a minimum of $5 million over the first three-year phase, drilling two exploration wells and acquiring and processing seismic data.
The North Qarun block is onshore close to Cairo in the Gindi basin of the Western Desert.
Santos entered North Africa with the 2004 farm-in to an eight-well exploration program covering three exploration blocks in Egypt with Devon Energy. The three companies’ shares are as follows: Santos (25%), operator Devon Energy (50%) and Teikoku Oil (25%).
Melrose Successfully Tested Oil in El Mansoura Area Source: Newsquest Media Group, June 28, 2005
Melrose Resources (link here) announced its first oil discovery in Egypt. Edinburgh-based Melrose said the El Tamad exploration well had successfully tested oil on the El Mansoura concession in the North African state in which it has made a series of finds of gas, a less valuable commodity.
The well, which was drilled to test an 87-foot hydrocarbon column, revealed by wireline logging, flowed oil at more than 2000 barrels per day (bpd), as well as 1.5million cubic feet of gas. Although Melrose will have to appraise the find with at least one more well before it can estimate the level of reserves it might contain, Chris Thomas, corporate development director, said the well result was very encouraging.The flow rate had been limited to 2000 bpd because that had been as much as the kit used by Melrose could handle. Further testing to determine the depth of the oil column will now become a priority for Melrose.
Separately, Melrose said the acquisition of a 50% working interest in the new south-east El Mansoura concession exploration block in Egypt, announced in February, had been cleared by the country's parliament.
US-based Merlon Petroleum (link here), which is also Melrose's partner in the central El Mansoura block, is buying the other 50% working interest in the site in the Nile Delta.
The south-east El Mansoura concession covers an area of 3730 square kilometers - roughly four times the size of central El Mansoura, where Melrose outputs around 100 million cubic feet gross daily (mcfpd) of gas - but has said it intends to raise that to 150mcfpd by mid-year.
Melrose is expected to drill a further 14 wells in Egypt before the end of the year. These will include appraisal and development wells on the South Batra field and exploration wells in other areas.
BG and GDF Strike Deal Source: Business Monitor International, June 22, 2005
Uk-based gas producer BG Group (AmCham Member) (link here), has agreed a contract with Gas de France (GdF) (link here) to take delivery of two liquefied natural gas (LNG) cargoes a month from July 2005 until December 2006. The load will be delivered to BG's North American marketing business in Lake Charles and Elba Island from Egypt LNG's first train. GdF originally bought the LNG but found it surplus to requirements.
The French company has ambitious expansion plans in Europe, aiming for a 15% share of the natural gas market. France has a fully privatized and competitive oil and gas industry with state holdings in electricity and gas suppliers Electricite de France (EdF) and GdF, which are scheduled for privatization in July. The upstream and downstream oil segments are de-regulated, with considerable involvement by international oil companies (IOCs) in refining and distribution, even though French oil major Total has the greatest market share.
The Commercial Division of the Egyptian Holding Company for Airports & Navigation issued on June 17, 2005 a request of sealed bids from eligible & qualified bidders as per the World Bank Guidelines for the supply of I.T. equipment (financial & management systems) under funding from the World Bank. Qualifications requirements include: (a) A minimum of 5 years experience as manufacturer or agent of similar products. (b) Annual revenue average over the past 3 years should reach double the bid price. (c) Any bidder should have a local agent to provide after sales services & maintenance at the time of contract award. A margin of preference of eligible national contractors shall not be applied. The specification fee is LE1,000. The Bid Bond is $10,000. Deadline for the submission of offers is August 8, 2005.
Electromechanical Works
The Cashier of Hydro Plants Generation Company (HPGC) issued on June 17, 2005 a request of offers from International manufacturers & specialists in DCS systems having agents in Egypt for upgrading two engineering & work stations (EWS), sequence of events (SOE). Also installing an additional workstation at the control power of the navigational lock at Esna power plant. Scope of works includes engineering, design, fabrication, furnishing, delivery, commissioning, testing & supervision of erection. The specification fee is $500. The Bid Bond is $15,000. Deadline for the submission of offers is August 22, 2005.
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