Alain Pilloux, vice president for banking of the European Bank for Reconstruction and Development (EBRD), was in Egypt last week for high-level meetings with government officials to discuss its new country strategy for Egypt.
He also explored projects aligned with Egypt’s priorities and the EBRD strategy such as on green hydrogen and desalination with the CEO of Egypt’s Sovereign Fund.
“The government is really concerned about upgrading and improving the investment and business climate in the country, which is good news,” Pilloux said. “The authorities do not deny the problems but try to address them. It is not an easy mission; it takes time. I am sure that Egypt will do well in the next few years,” he added.
Pilloux noted that Egypt has come through the Covid-19 pandemic better that many peer countries and that it is determined to keep its economy alive and growing.
On the EBRD’s new country strategy for Egypt, Pilloux explained that what guides the bank’s operations in the country is its desire to impact Egypt’s development. Egypt is a founding member of the EBRD, and since the start of its operations in 2012, the bank has invested more than €8 billion in 136 projects across the country.
Egypt is also the largest country for the bank’s operations in the Mediterranean region in 2020 and 2021.
According to Pilloux, the new strategy centres on three pillars: inclusion, the green economy, and competitiveness. On inclusion, he said that the strategy focuses on the inclusion of the people in the economy, particularly women, who are a high priority for the bank, and young people entering the job market.
The green pillar, Pilloux said, involves supporting Egypt in its efforts to mitigate climate change-related impacts and to adapt to climate change itself. Another important aspect of this pillar is ensuring the stability and sustainability of the country’s water resources.
In her first official visit to Egypt in April, President of EBRD Odile Renaud-Basso commended the country for giving due attention to the green economy and renewable energy, saying that it was the bank’s intention to continue to support Egypt in all areas that serve the UN Sustainable Development Goals (SDGs), especially desalination projects.
The third pillar of the EBRD’s strategy for Egypt means continuing to work on improving the competitiveness of the Egyptian economy in all sectors and making sure that more Egyptian companies are able and willing to export to foreign markets, whether to African markets or those outside the continent, Pilloux said.
“We want to ensure that state-owned companies are well-run, commercialised, effective, efficient, and follow the market’s latest standards,” he said, adding that the bank remains committed to helping Egyptian startups access finance and work in an environment where they can flourish, including by facing obstacles and the ongoing Covid-19 pandemic.
Pilloux said there was a need to support enterprises that seek to export. He also stressed the need to secure a level playing field for companies, whether state-owned or in the private sector.
He said the EBRD has a commitment to shareholders to make sure that 75 per cent of its pledges are dedicated to backing the private sector in the countries where it operates, including Egypt. The bank does this in various ways in Egypt, he said, including through loans inked for renewable energy and infrastructure projects.
The EBRD is also a partner of 15 local banks that provide loans for small and medium-sized enterprises (SMEs), he said.
More help is extended to the private sector through a programme called the Advisory for Small Business (ASB), Pilloux said, adding that the good feedback the bank has received has encouraged it to expand the programme.
“We are working with the authorities to improve the environment for SMEs in order to ensure the competitiveness that will enable them to succeed and grow,” Pilloux explained.
He said that the bank’s new country strategy for Egypt is subject to consultations with the Egyptian authorities and shareholders, after which it would be posted for public consultation for 45 days and then be submitted to the EBRD’s board of directors by the end of January for approval.
The new strategy is expected to come into effect at the beginning of February 2022.
Touching upon the future steps of the bank in the Egyptian market, Pilloux said that the EBRD intends to intensify its partnerships with local banks and supply a wider range of products that can be used to lend to SMEs working in energy efficiency and women’s and young people’s empowerment.
“We also plan to partner with more local private-equity funds and venture-capital trusts and to invest wisely in startups,” he noted.
The EBRD plans to intensify its support for the private sector and the government in Egypt, particularly in infrastructure. Pilloux cited the EBRD’s investment in Egypt’s first land port in 6 October city, adding that the bank intends to invest in another dry port set to be established in 10 Ramadan city.
“We are in touch with the government on further cooperation in other infrastructure-related projects,” Pilloux noted.
He said that the EBRD plans to sign an important loan to finance part of the future Alexandria metro and of the Cairo metro next year, adding that the EBRD supports such projects because they are 100 per cent green.
The EBRD is considering cooperating with the state in a project to upgrade electricity transmission lines in the country because they will need to be able to transport the renewable energy that will be generated in future, he said.
The EBRD is also eyeing projects related to hydrogen production in line with Egypt’s plans to be a regional energy hub, which are also supported by the bank, Pilloux said.
*A version of this article appears in print in the 28 October, 2021 edition of Al-Ahram Weekly