Cairo, 29 June 2024
At the EU-Egypt Investment Conference, co-organised by the EU and the Government of Egypt on 29-30 June, the EU and Egypt are teaming up to intensify private sector investments in Egypt. They are also signing a Memorandum of Understanding (MoU) for the disbursement to Egypt of up to €1 billion in Macro-Financial Assistance. The Investment Conference and the signature of the MoU are the first concrete deliverables of the Strategic and Comprehensive Partnership (the Partnership), signed by the EU and Egypt in March 2024, in recognition of the important geostrategic role Egypt plays as a pillar of stability in the region.
Opening the Investment Conference, European Commission President Ursula von der Leyen said:
“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. We deliver for Egyptian businesses and entrepreneurs with €1 billion in macro-financial assistance, which will incentivise the reforms that businesses and entrepreneurs in the private sector need. We deliver strategic investments that will help make Egypt a clean energy hub at the centre of the Mediterranean, crossroads. And we deliver for Egypt’s youth, with a new skills programme so they succeed in the economy of the future. And this is just the beginning.”
Investment Conference
The Investment Conference is a key platform for discussion on economic reforms pursued by Egypt to improve the business environment and to attract further EU investment in key sectors. These reforms and investments are expected to drive forward the energy transition, in areas including the production of renewable hydrogen, to promote the circular economy, and to boost the pharmaceutical, medical and automotive sectors. Investments are also directed towards sustainable agriculture and food systems, water security, as well as innovation and digitalisation. The Investment Conference brings together some 1,000 participants, including EU and Member States representatives, Egyptian senior officials, international financial institutions and CEOs of European and Egyptian companies.
An important number of private investment agreements worth €40 billion are expected to be announced and signed by European and Egyptian companies at the Investment Conference, including in sectors such as renewable energy and hydrogen.
At the Conference, the EU and the Government of Egypt are signing the Green Sustainable Industry programme. The programme, supported by a €30 million EU grant that unlocks a €271 million loan by the European Investment Bank (EIB) and partner banks, will assist industry in Egypt to invest in pollution abatement, decarbonisation, energy and resource efficiency.
To boost youth employability and skills, support Egypt to address the gaps in the child protection system and to enhance manufacturing capacities and access to vaccines, medicines and health technologies, the EU and the government of Egypt are signing three Financing Agreements, worth €36 million in total, as part of bilateral cooperation programmes. A €60 million EU support package to improve grain storage in Egypt under the Food and Resilience Facility is also being signed at the Conference.
The EU and Egypt are also signing the Financing Agreement for the Interreg cooperation programme NEXT MED, which aims to foster fair, equitable and sustainable development across the Mediterranean Sea Basin and as such contributes to the EU’s Agenda for the Mediterranean. With an EU contribution of €263 million, the NEXT MED is the largest EU-funded external cooperation programme in the Mediterranean Sea Basin. It brings together the coastal territories of 15 countries (7 EU and 8 partner countries), including Egypt.
Signature of Memorandum of Understanding for up to €1 billion in Macro-Financial Assistance
The up to €1 billion in Macro-Financial Assistance (MFA) is the first of two MFA operations for Egypt that is to provide a total of up to €5 billion in favourable loans to Egypt. This MFA support constitutes the large majority of the €7.4 billion in EU financial support under the Partnership.
The MFA operations will help address Egypt’s external financing needs. They will also underpin the delivery of an ambitious policy programme containing strong, immediate adjustment and structural reforms to help put Egypt’s economy on a sustainable economic path.
At the Conference, the Memorandum of Understanding (MoU) for the first MFA operation is being signed. The MoU lays out a set of relevant, macro-critical homegrown reforms that are deemed feasible to deliver within the short assistance horizon of this operation, where disbursement is expected before the end of 2024. Agreed policy action covers three pillars: it is expected to promote macroeconomic stability, improve the business environment and enhance Egypt’s competitiveness, and support Egypt’s green transition. In some cases, policy action are steppingstones for further, more comprehensive ambitious reform efforts in the medium term, which could be considered to be included in the reform agenda to be negotiated in the subsequent €4 billion MFA operation, once adopted by the Council and the European Parliament.
Subject to progress on the reforms agreed in the MoU, disbursement of the corresponding up to €1 billion in MFA support could take place in one tranche at the end of 2024.
Background
The Council adopted the short-term MFA of up to €1 billion on 12 April 2024.
A longer-term operation of up to €4 billion of MFA is expected to be adopted by the European Parliament and the Council later this year. This will be followed by the negotiation of the reform programme underpinning this second MFA, which will be laid out in a second MoU.
More information
Quote(s)
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. We deliver for Egyptian businesses and entrepreneurs with €1 billion in macro-financial assistance, which will incentivise the reforms that businesses and entrepreneurs in the private sector need. We deliver strategic investments that will help make Egypt a clean energy hub at the centre of the Mediterranean, crossroads. And we deliver for Egypt’s youth, with a new skills programme so they succeed in the economy of the future. And this is just the beginning.
Ursula von der Leyen, President of the European Commission
The EU is committed to strengthening its ties with Egypt, a strategic partner and important pillar of regional stability. Our macro-financial assistance is linked to a series of economic policy reforms for Egypt to address its vulnerabilities, boost resilience and support the green transition. This sends a strong signal to international investors of Egypt’s reform commitment and its willingness to substantially improve the business environment. As a token of closer cooperation between Egypt and the EU, this short-term support will also make Egypt’s growth path more sustainable and inclusive.
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People
Today’s investment conference is a testament to the predictable and reliable Strategic and Comprehensive Partnership between the EU and Egypt for our shared prosperity, stability, and security and to our ever-growing positive agenda that delivers. The first €1 billion out of the €7.4 billion financial and investment package is a reality. These investments will open up new opportunities for our investors, particularly in renewable energy and green transition. Within this package, new investments will modernise the economy, create growth and jobs and develop human capital. This is just the beginning, more to come.
Olivér Várhelyi, Commissioner for Neighbourhood and Enlargement
Source – EU Commission
EU factsheet about the Strategic and Comprehensive Partnership with Egypt
President Abdel Fattah el-Sisi: Egypt-EU ties positively growing in all fields of cooperation
29 June 2024
President Abdel Fattah El Sisi has stressed that relations between Egypt and the European Union have been growing positively in all fields of cooperation.
This came in his speech at the opening of the Egypt-EU Investment Conference, which kicked off at Al Manara International Conference Center in New Cairo on Saturday 29/6/2024.
The opening ceremony was also attended by President of the European Commission Ursula von der Leyen.
“The relations between Egypt and the European Union have witnessed positive development across various fields of cooperation. This progress was crowned with the signing of the political declaration to elevate the relationship between both sides to the level of strategic and comprehensive partnership in March,” Sisi said.
“We are gathered for the second time, in a short span of time, to witness the convening of the Egypt-EU Investment Conference 2024, which represents the initial step towards the elevation of relations and also reflects the commitment of Egypt and the European Union to moving beyond the stage of pledges to the stage of implementation,” Sisi said.
The President pointed out that the strategic partnership between Egypt and the European Union included six axes, on top of which was the axis of investment.
Sisi stressed that both sides are committed to enhancing cooperation across various priority economic sectors, including trade, energy, infrastructure, sustainable transportation, agriculture, food security, digital transformation, water security, water and sanitation networks as well as Small and Medium and Micro-sized Enterprises.
President Sisi said the estimated European investments in these sectors are expected to hit approximately 5 billion euros, in addition to investment guarantees worth 1.8 billion euros for the private sector.
These investments will contribute to luring more foreign direct investments and enabling the European business community to benefit from the investment potential in Egypt, he said.
“At the same time, it shall strengthen the position of the European Union, being the Egyptian economy’s most prominent trade and investment partner,” the president said.
President Sisi thanked the President of the European Commission for her efforts to elevate relations with Egypt, stemming from her belief in the centrality of Egypt’s role as a major strategic partner of the European Union in the region, also in a way that reflects “the strength of our bilateral relationship, particularly in critical times that the global economy is going through.”
Sisi stressed that the conference is held at an extremely critical time, in light of the successive international and regional crises that have cast a very negative shadow and multiple challenges and economic burdens on all countries at various levels.
“This requires continuous support and coordination between Egypt and its partners in Europe to sustainably address these challenges, especially after Egypt has proven that it is a reliable partner in facing common challenges and in a way that achieves security and stability in our regional neighborhood.
Egypt is taking steady and rapid steps on the path of change and reform for a more sustainable economy. In its pursuit to achieve that, the State has undertaken a number of reforms to further empower the private sector, increase the competitiveness of the Egyptian economy, support the green transition, and mobilize foreign direct investment,” the President said.
He added that the conference will give European countries and economic entities the opportunity to explore the available investment potential in Egypt, especially in areas that stimulate economic growth and employment, such as the sector of communications and information technology sectors, manufacturing industries, clean and renewable energy production and the circular economy.
“This is in addition to promoting Egypt as a regional hub for supply chains for European companies and a hub for the transfer and trade of renewable and green energy, in light of Egypt’s geographic proximity and strategic location, as well as shedding light on areas that attract investment in Egypt, such as the Suez Canal Economic Zone,” Sisi said.
The President stressed that the organization of the conference is “a message of confidence and support” from the European Union for the Egyptian economy and the economic reform measures that have been implemented over the past ten years.
“The State is keen to continue implementing them during the coming period, reflecting the success of these steps and confirming Egypt’s ability and will to overcome economic challenges and to move forward with the implementation of the comprehensive development plan,” President Sisi said.
The President welcomed all attendees at the conference, voicing hope that the event can contribute to strengthening cooperation between Egypt and the EU.
“I welcome you again and I look forward to witnessing a successful and fruitful conference that achieves tangible results that enhance economic cooperation between Egypt and the European Union and contribute to increasing the flow of European investment to the Egyptian market and therefore achieve prosperity, security and stability for our peoples and countries,” President Sisi added.
Source – State Information Service of Egypt
Speech by President von der Leyen with Egyptian President el-Sisi at the EU-Egypt Investment Conference
Cairo, 29 June 2024
Mister President,
Excellencies,
Ladies and Gentlemen,
It has been only 100 days since we opened a new era of friendship between Egypt and the European Union. And today, we are already reaping the fruits. President El-Sisi, thank you so much for your splendid hospitality. Last March, you welcomed me and five other European Leaders, here in this beautiful timeless city, and the two of us signed a new Strategic and Comprehensive Partnership. Of course, this new agreement builds on profound ties between our people, and decades of cooperation between Egypt and the European Union. Europe is already Egypt’s largest trade partner and investor, accounting for 40% of your foreign direct investments. And with our new agreement, we have decided to reach a new level of strategic engagement between us. You 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.
Today, we come here to Cairo, accompanied by European companies, investors and financial institutions. Indeed, we have over 1,000 company representatives in the room eager to hear from us on new business opportunities But of course, we are also eager to hear from you what further actions you need from us to facilitate investments.
As the European Union, we are making good on the commitments we made just three months ago. Let me mention three of them: First, more financial assistance. Second, more investments in strategic sectors. And third, more skills for Egyptian workers.
On my first point. In March, we announced a major financial and investment package worth EUR 7.4 billion. And today, we sign the first EUR 1 billion in macro-financial assistance. This package will accompany and incentivise Egypt’s reform agenda that the private sector needs. And these reforms will foster a stronger business environment, attract more investment and create more good jobs in Egypt.
Second, with our Strategic Partnership we have committed to step up our strategic investments in Egypt. Now we aim to mobilise new European investments worth EUR 1.8 billion. This will go to the strategic sectors we have identified together last March. Let me just give one example. Egypt has the ambitious goal of becoming a clean energy hub. And this is in Europe’s interest too. Such a clean energy hub would put Egypt at the centre of the Mediterranean crossroads, with new corridors to transport clean electricity and hydrogen, but also creating new clean-tech value chains that span across our region, from the Gulf to Europe. Today, we rely on batteries, solar panels and wind turbines that are mostly produced far away. What if we joined forces to produce them in our common region? We are now investing in this vision, like never before.
To achieve this, we also have to strengthen the skills that Egyptians need to thrive in the economy of tomorrow. This is my third and last example. Today, we are signing a new project, worth EUR 25 million, to provide clean-tech and digital training to young Egyptians. So that companies find skilled personnel, and Egyptians can find good jobs and make their living.
Ladies and Gentlemen,
We are backing our new partnership with substantial public investments. But what truly makes a difference is that the private sector is also on board. With our Strategic Partnership we have created a framework of trust and of certainty about the future direction of our relationship. This is exactly the message the private sector needs and expects, rightly so, to hear from us. Our commitment to support Egypt in its reforms has already sparked private sector action. The response we have received since last March has been overwhelming. At this Conference, European companies are signing over 20 new deals or MoU’s with Egyptian partners, which are worth over EUR 40 billion. We have companies in sectors ranging from hydrogen to water management, from construction to chemicals, from shipping to aviation and automotive. You cover all the priorities that we have set out in our new partnership. And this is crucial.
Thank you for the trust you are placing in this partnership. Because we need each and every one of you to make this partnership successful. Our public investments can unlock new business opportunities for you. But only you have the know-how to set up new industries here in Egypt, or to train local workers. It is you, in the business sector, who are pioneering the technologies of the future, and we need you.
Ladies and Gentlemen,
In just 100 days, we have already brought new energy into our partnership. And this is just the beginning. Today, Egypt and Europe are closer than ever before. So this is a true win-win partnership, for Egypt and for Europe alike, for the people and for business, and of course for the common good.
Thank you.
Source – EU Commission