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Tuesday, 11 August 2020

Egypt's sovereign fund to focus on healthcare instead of investment owing to coronavirus

The fund has shifted priorities to include food and pharmaceutical manufacturing, healthcare services and other key sectors amid the pandemic crisis

Menna Alaa El-Din , Monday 8 Jun 2020
Egypt
File photo: Egypt's Prime Minister during a meeting with the Egyptian Sovereign Wealth Fund (SWF)
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Egypt’s Sovereign Wealth Fund (SWF) said on Monday it has rearranged its priorities to include vital sectors, including the healthcare sector, due to the coronavirus pandemic crisis.

In a virtual press conference attended by Ahram Online, the SWF’s executive Ayman Soliman said the fund has repositioned priorities to include food and pharmaceutical manufacturing, healthcare services and financial services and financial inclusion sectors.

He said the fund will establish four funds in the coming period, covering the prioritised sectors, and three other funds later. 

Egypt has been seeking to back an ailing healthcare amid the pandemic which many fear would take a toll on the sector due to the growing infections in the past weeks. 

Last month, the SWF inked a memorandum of understanding (MoU) with US Concord International Investment Group to establish a joint firm to moderate a fund specialised in healthcare in the Middle East and North Africa region. 

The specialised fund’s first phase, worth $300 million, targets maximising the assets on the long run through making use of foreign direct investment (FDI) opportunities, in addition to attracting FDI flows and creating joint investment opportunities in other mega projects.

“The SWF will not hold a majority stake in the fund; those would be held by strategic investors,” he revealed. 

But as the SWF pushes with plans related to the healthcare focused fund, it also eyes a financial technology sector, which it says has been booming amid the virus crisis. 

“Investments in financial technology [fintech] is no longer a luxury, especially as some sectors see a recovery due to the pandemic,” Soliman said. 

He revealed that there are current talks with a number of investors over investment opportunities in the sector without providing further details. 

He said the fund has held talks with a number of African funds in Senegal, Uganda and others to export the ‘Egyptian experience’ on financial technology directly. 

Soliman said the fund’s priorities also include investments in manufacturing and infrastructure due to a growing investor appetite in infrastructure. 

“There are incoming requests to the fund for investments in infrastructure. Our goal is to use capital recycling in the sector,” he said. 

Soliman also tackled a strategy focused on a plan revealed earlier this month related to renovating Old Cairo’s historic Bab Al-Azab district after news spread of the collapse of talks with private investors, including business and property mogul Samih Sawiris. 

“We see a potential as talks with private investors continue. Many studies should still be carried out [on the renovation of the area]. The investors' appetite is still there; yet amid the crisis, tourism renovation is currently not among the priorities,” he said. 

He added some of the ministerial buildings located in the Downtown area are among the assets offered to the fund along untapped assets. 

On the renovation of buildings in the area, Soliman said the fund has a "vision" for developing the renowned Downtown area due to its "historical and civilised" value. 

“We could submit requests on ministerial buildings directly with various ministries per the fund’s law on assets,” he said. 

“Our goal is to formulate a masterplan for the area in cooperation with private sector and public sector partners,” he said, adding that the fund aims to transform the area to an economic hub or a tourist attraction. 

On the parliamentary amendments on the SWF law, Soliman said the “law will give more flexibility in procedures,” stressing that transparency will be maintained. 

The amendments, discussed by parliament this week, exempt the fund and its owned entities and sub-funds from taxes and fees and restricts legal actions against the fund. 

Soliman also discussed the delay of an anticipated Banque du Caire initial public offering (IPO), which was slated for mid-April, due to the coronavirus crisis amid an interest by the fund with Abu Dhabi Development Holding Company (ADDHC) in recent months. 

“The postponement was a very wise decision amid the current global circumstances. The issue is still on our radar with our partners and we will explore any decision on the revival of the IPO process,” he told Ahram Online. 

He added that the fund, through its Arab and foreign partnerships and sub-funds, aims to create entities that can be offered in the bourse to enrich the money market later. 

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