Ahram Online spoke to Pilloux during his two-week visit to Egypt to follow up on the EBRD’s investments in Egypt, explore new investment opportunities, and discuss with the Egyptian government its privatisation programme and other actions it has taken to unlock the potential of the private sector in the local market.
Egypt is the largest country of the EBRD’s operations in the Mediterranean region.
The EBRD has financed 163 projects since it began operations in the country.
Of these projects, 57 percent were directed to the private sector.
Pilloux revealed to Ahram Online the EBRD’s intention to seize the investment opportunities Egypt offers through its anticipated Initial Public Offering (IPO) programme.
Egypt’s government released in February a list of 32 state-owned companies that will go public starting March, either through floating a portion of their stakes in the Egyptian stock market or assigning a group of them to a strategic investor.
“Egypt’s privatisation programme is crucial for its economy. Through this programme, Egypt can show to the world that it is a place the investor can do business. For that reason, we are significantly interested in the opportunities the programme avails with an aim to give them additional credibility and additional impact. We plan to tap these opportunities, apart from the fossil fuel investment opportunities”, Pilloux told Ahram Online.
Pilloux also stressed that Egypt’s IPO programme, privatisation programme and the State Ownership Policy are good signs for the investment environment in the country, adding that the country’s new $3 billion deal with the International Monetary Fund (IMF) is also fundamental to stabilise the economy, as the private sector can develop only in a context of stability.
“Also, Egypt’s success in involving the private sector in the development of the industry of solar and wind is really important. Actually, Egypt is a remarkable example of development both in the south of the country for solar and also in the Gulf of Suez for wind because the country has been able to establish rules of the game which were practical and which have remained stable and this is what the private sector needs to develop”, according to Pilloux.
“Because of that, in the last few years local investors and also foreign investors have considered investing in Egypt and producing. This is a very good example of what can be achieved. The state did its part in development as well because it is the state that established the rules of the game, stabilised them and maintained them over the time”, Pilloux affirmed.
Moreover, Pilloux told Ahram Online that the EBRD is committed to do everything it can to reinforce the competitiveness of the country in hydrogen, renewables, desalination, private sector, and banks, stressing that these areas require a lot of investments to be pumped in Egypt and more commitment and consistency by the authorities.
Ahram Online also discussed the EBRD’s new updates on its role as the key catalyst of energy projects under Egypt’s Nexus for Water, Food and Energy (NWEFE), launched during the COP27 as a footprint to be followed in terms of accelerating climate action, especially in developing countries.
In this respect, Pilloux said that the EBRD is very proud to be the leading international financial institution for energy projects under the NWEFE platform.
“We are working closely with the Ministry of International Cooperation in this respect. This role means a lot to us. Over the short term, we wish to contribute in a major way to the reinforcement of the transmission of electricity in Egypt since it is the condition to develop renewables. We are ready to put a lot of money, as much as needed, in order to contribute to that. Egypt also can rely on us to support every single attractive renewable investment, in particular in the wind area. Soon, we will support a very large project in the Gulf of Suez area in this regard”, Pilloux explained without giving more details on the Gulf of Suez project.
Pilloux said to Ahram Online that he was pleased with the country’s growth and potential.
“What I see every time I come to Egypt is that it is a country with enormous potential, so I am very positive about the future of Egypt, a country with a lot of talents and where it sets a good balance between what the private sector does and what the public sector does. Every sector can contribute to the growth and the wellbeing of the country and population”, said Pilloux.
Pilloux also stressed that it is important for EBRD to be sure that the funds it has committed to Egypt reached its economy and are tangible for its population.
“It is a pleasure to see the role we play materialised in the real life of the population of Egypt”, Pilloux spelled out.
In the same context, Pilloux expounded that he also followed up on the country’s green agenda and the EBRD’s support in this regard.
“We have discussed here a number of new initiatives, which will attract investments into Egypt; one of them relates to a planned construction of a desalination plant with a pilot project which will include five desalination plants in the North of the country. The second focuses on a planned development around the Suez Canal Economic Zone (SC Ezone) of a hydrogen industry. This kind of investment is complicated. Hydrogen is not a new source of energy, but the developments of this source of energy are very important and need a lot of investments”, Pilloux explained.
In this respect, Pilloux emphasised that Egypt is well-located for this kind of project.
“Thanks to the COP27 Egypt has entered into a number of agreements with a number of local and foreign companies and now we are trying together with all the concerned parties and with the government to accelerate the implementation of these agreements”, according to Pilloux.
On how the EBRD supported Egypt in 2022 amid the severe impacts of the war in Ukraine, Pilloux told Ahram Online that 2022 was a difficult year for the world and, consequently, for Egypt.
He added that the EBRD stepped up its activities in the country over 2022, investing about $1.4 billion, the highest investment the bank has ever made in the country since the onset of its operations in Egypt.
“There is room to do even more than that. The main point is to generate opportunities to work and to invest”, Pilloux noted.
“In Egypt, we engage a lot with the local banks in both private and public sectors in order to channel finances to small and medium-sized enterprises (SMEs), to women and young people who are creating businesses in order to create jobs. It is a large activity for us. Last year, out of the $1.4 billion we invested, $6.5 million went to the activities I mentioned. Also, we facilitated imports and exports in Egypt through a special programme and we will continue of course to do that because it is an activity which has immediate and strong impact on job creation and preservation in Egypt”, according to Pilloux.