Egypt signed energy deals and MOUs worth over $40 billion with international companies including many from the Gulf, meeting Egypt's energy crunch with an appetite for investment. As the second day of Egypt's Economic Development Conference drew to a close, the new investments announced were primarily in the fields of power generation and the oil and gas sectors, which have suffered from a lack of investment in recent years. Oil and gas deals British Petroleum made the single largest foreign investment deal in Egypt's history, committing to invest $12 billion over four years to develop gas resources and condensates in the West Nile Delta. Production from the project, scheduled to start in 2017, is expected to reach about 25 percent of Egypt's current gas production. Italian oil company Eni signed heads of agreements worth $5 billion in several gas discoveries over 4-5 years. The deal will be finalised within six weeks. British energy company BG said it will sign a $4 billion agreement with Egypt on Sunday to develop natural gas fields in the Mediterranean over two years. Another $350 million gas deal was announced by the UAE's Dana Gas, which involves the drilling of nearly 40 new development wells, a similar number of workovers on existing wells, building new pipelines and debottlenecking an existing plant over the next 30 months, Patrick Allman-Ward, CEO of Dana Gas told Reuters. This brings the total value of future gas projects agreed on to over $21.5 billion. Power generation Meanwhile, MOUs worth around $22 billion were signed by Egypt's electricity minister. German industrial powerhouse Siemens International signed four MOUs worth over $10 billion with Egypt to construct several power plants with a total production capacity of 6.6 gigawatts. The package includes binding agreements worth $4.6 billion for a 4.4 gigawatt power plant in southern Egypt, a project to generate 2 gigawatts of wind power, and a new wind rotor blade factory, Siemens CEO Joe Kaeser told AP. ACWA Power International of Saudi Arabia and Masdar of UAE will also invest $2.4 billion to construct a number of power plants, including solar plants and a wind energy project. The total production capacity will be up to 4,400 megawatts. ACWA will invest another $7 billion for the construction of a coal power plant. Egypt has suffered from increasingly frequent power cuts in past years, which have not only hit households but seriously limited the production capacity of energy-intensive industries such as fertilisers and cement. “The problems started in 2005 as electricity consumption grew at a faster rate than expected,” said Mohamed El-Sobki, chairman of the New and Renewable Energy Authority (NREA). A slowdown in the production of natural gas, the main fuel used in power plants, following Egypt's 2011 revolution exacerbated the energy shortage. The government has taken steps to attract private investments to the sector, setting feed-in tariffs for renewable energy and issuing a new electricity law that liberalises electricity production and transmission, and allowing private investors in some sectors like cement production to shift to coal for power. In addition, Egypt will establish an independent regulator for the oil and gas sector “in six months or more,” Minister of Petroleum Sherif Ismail announced at the conference. Shopping and retail Emirati mall operator Majid Al-Futtaim signed an MOU with Egypt to invest LE5 billion ($655 million) in eight projects over five years, bringing up its investments in Egypt to LE23 billion (more than $3 billion) Reuters reported. Four of the projects will be retail centres in new cities and four others will be shopping centres in Cairo. Alain Bejjani, CEO of Majid Al-Futtaim group, said that his company's investments will create 144,000 direct and indirect job opportunities by 2018. KBBO group investments A private Emirati investment group, Khalifa bin Butti Bin Omeir (KBBO) group, said it planned to invest $2 billion in key sectors of the Egyptian economy, its chief executive told Reuters on Saturday. The Abu Dhabi-based KBBO based sees Egypt as primed for growth, CEO Nabeel Rahman said in a statement. "We will contribute in investing in health, money exchange, waste management, renewable energy and other fields," he said. KBBO runs investments in financial services and defense and owns stakes in Abu Dhabi-based healthcare provider NMC Group, UAE Exchange, UAE Defence Technology Company and others. Damietta grain hub and Suez Canal Zone The UAE's Al-Swidan Group signed two deals worth a total of $6 billion with Egypt to invest in the grain logistic hub in Damietta in Egypt's Delta as well as in the Suez Canal Development Project, Reuters reported. Minister of Supply Khaled Hanafi said that the UAE's Al Ghurair group has expressed its intention to acquire a third of the storage capacity of the grain hub. Indian companies have also shown interest in the project, intended to be a regional hub to store, trade and process grain. Transportation and logistics Egypt signed six agreements with international companies for logistics and transportation projects worth a total of $2.2 billion, state news agency MENA reported. The projects include a station at Ain Sokhna port at a cost of $415 million with Dubai International Ports Company and agreements with the Chinese AVIC International Holding company to manufacture train carriages and an electric train at a total cost of $1 billion. http://english.ahram.org.eg/News/125244.aspx
