A two-day Egypt-EU investment conference concluded on Monday with the signature of €67.7 billion in deals and memoranda of understanding (MOUs) designed to support Egypt’s economy against the background of a turbulent region.
The conference, held under the theme of “Unleashing Egypt’s Potential in a Rapidly Changing World,” saw the attendance of 1,000 participants, including Egyptian President Abdel-Fattah Al-Sisi and EU Commission President Ursula von der Leyen together with top officials from both sides as well as representatives of international financial institutions (IFIs), and Egyptian and European investors.
The deals cover a wide array of sectors, including green hydrogen and green ammonia production, renewables, tech and telecommunications, electric vehicle manufacturing, infrastructure, sustainable transport, and training.
The deals and MOUs are with EU-affiliated bodies as well as with non-affiliated entities from countries that export to the EU.
In his speech opening the conference, Al-Sisi said it was the first step in the process of upgrading Egypt-EU relations under the Egypt-EU Strategic and Comprehensive Partnership agreed by both sides in March 2024.
He said that the event mirrors Egypt’s and the EU’s commitment to move from pledges to implementation under the partnership agreement.
Under the partnership, the EU has pledged to provide Egypt with a financing package of €7.4 billion ($8 billion) until 2027. This week’s conference saw the approval of €1 billion in loans out of this package to be used to support the Egyptian economy against the negative repercussions of regional tensions.
“One-hundred days ago we opened a new era in the relations between Egypt and the European Union with our Strategic and Comprehensive Partnership. Today, we deliver” on the promises made under the partnership, Von der Leyen said in the conference’s opening session.
She said that besides the €1 billion in financial assistance announced at the conference, there were also other strategic investments that would help to make Egypt a clean energy hub in the Mediterranean region.
She said that the EU is delivering for Egypt’s youth, with a new skills programme so they can succeed in the economy of the future. “And this is just the beginning,” she said.
The total package agreed upon in March includes €5 billion in concessional loans as micro-financial assistance, €1.8 billion of additional investments that would be provided by IFIs under the Southern Neighbourhood Economic and Investment Plan, and €600 million in grants including €200 million for migration management.
“You [Egypt] are a gateway to Europe, between Africa and the Middle East, and between the Mediterranean and the Indo-Pacific. So, your stability and prosperity are essential for an entire region,” Von der Leyen said.
During the conference, the investment arm of the EU, the European Investment Bank (EIB), pledged €600 million in new private-sector investments, particularly for the renewables and pharmaceutical sectors.
The EIB is the leading international financing partner for Egypt with a total of $2.8 billion provided by the bank to the country’s private sector from 2020 to 2023.
Speaking to Al-Ahram Weekly, Vice President of the EIB Gelsomina Vigliotti said that the bank prioritises climate action-related projects. She stressed that Egypt has incredible potential to develop and expand its use of renewable energy.
Heike Harmgart, managing director for the Southern and Eastern Mediterranean (SEMED) region at the European Bank for Reconstruction and Development (EBRD), told the Weekly that the conference represented an opportunity for European investors to explore the priorities on the Egyptian government’s agenda in terms of the investment opportunities they can tap.
Egypt led the EBRD’s investments in the SEMED region in 2023 with new commitments to 16 projects totalling around €1.3 billion.
“The EBRD will be interested in continuing to blend its and the EU’s financing for Egypt to make projects more affordable. We already have a big electricity transmission project currently under discussion. This would benefit from some EU grants,” Harmgart said.
Egypt has been suffering from shortages of the gas needed to operate its power stations, resulting in blackouts and forcing four major fertilisers and petrochemicals producers to halt their operations last week.
The government has allocated urgent financing worth $1.1 billion to purchase 17 liquid natural gas (LNG) shipments from external markets to address the crisis while applying a plan starting on 1 July to lower the working hours of retail shops across the country.
“The investment atmosphere in Egypt is promising, and we are very supportive of the Egyptian economy amid the ongoing challenging phase, in collaboration with other IFIs, to help it navigate the economic challenges it suffers,” Harmgart said.
* A version of this article appears in print in the 4 July, 2024 edition of Al-Ahram Weekly
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