CHANGE FOR A NEW EGYPTenergy hub. The Desertec Project, a high profile European solar energy initiative with a goal of generating up to 15% of Europe’s electricity through giant

NEW EGYPT

CHANGE FOR A BRIGHTER FUTURE

2 Change for a brighter future—New Egypt

Change for a brighter future—New Egypt 1

I WELCOME THE COMMITMENT OF THE EGYPTIAN AUTHORITIES TO LASTING CHANGE AND STRUCTURAL REFORM AT THIS HISTORIC MOMENT FOR THE COUNTRY.

WE ARE OPTIMISTIC THAT THE PROGRAM’S OBjECTIvES OF PROMOTING SOCIAL jUSTICE, FOSTERING RECOvERY, AND MAINTAINING MACROECONOMIC STABILITY AND GENERATING jOBS WILL BRING POSITIvE RESULTS FOR THE EGYPTIAN PEOPLE. John Lipsky, Acting Managing Director of the IMF, June 2011


REvOLUTION FOR POSITIvE CHANGEThe events of January 2011 have changed the future of Egypt for good—and for the better.

There is a great sense of optimism as an inherently strong economy, bubbling with talent at the intersection where north meets south and east meets west, looks to the future.

Investment, growth, and employment continue to be our priorities.

While many investment decisions have been postponed until a new government is elected, the Egyptian economy is still liberal, heading in the right direction, and within a framework of social justice and an attractive investment environment. Yet, a number of new investments and expansions have taken place post January 25th, such as Intel, Electrolux, CDB (China Developing Bank), Cisco, and EHC (Egyptian Hydrocarbon Company).

The fall of the Mubarak regime is proof that Egypt’s political landscape can only be moving forward, toward a free and democratic society. This is a clear sign that it is well positioned for a prosperous future that is attractive for any international investor. The country will continue to protect the promising investment environment it has created thus far, if not enhance it with the upcoming political reforms.

There will be no turning back on the market–driven economic policy. Egypt is fully committed to economic reforms. It is focusing on sustained economic development driven by a young, entrepreneurial private sector and foreign direct investments.

Egypt is a safe and attractive investment destination offering not only the growth drivers that it has always enjoyed, but also greater democratic freedom where the rule of law prevails, giving added assurance and protection for all investors in an open market economy. The opportunity for you to invest in Egypt is now.

EGYPT HAS A YOUNG, EDUCATED, WIRED-IN AND, AS WE’vE ALL SEEN, EMPOWERED POPULATION. AND IT’S BIG. MOREOvER, EGYPT STILL HAS ITS INCREDIBLE ASSETS: STRATEGIC GEOGRAPHIC LOCATION, THE NILE, THE SUEz CANAL, UNPARALLELED TOURIST ATTRACTIONS.Tammer Qaddumi, Private equity analyst in Abu Dhabi, Oil & Gas Financial Review, March 2011



EGYPT HASN’T MOvED. IT IS STILL SITUATED ON THE HIGHLY FERTILE BANkS OF THE NILE, AND IS STILL THE CENTER OF COMMERCE IN THE ARAB WORLD. EGYPT PRODUCES NATURAL GAS, WHICH MAY BECOME A POPULAR SUBSTITUTE FOR OIL IN THE FUTURE.Sara Grillo, CFA & founder of Grillo Investment Management, LLC, Business Insider, April 2011

PeopleEgypt has a population of nearly 83 million, of which 57% are under the age of 25. The strength of Egypt lies in the strength of its people. This has been the most important gain from the revolution: a huge energized manpower resource that can be utilized for growth. Youth are now more eager than ever to build a stronger Egypt.

Natural ResourcesEgypt’s abundant natural resources and geographical location make it the ideal investment destination.

Egypt is rich in sunlight, heat and wind power. It is endowed with a high intensity of direct solar radiation, ranging between 2000 and 2600 kWh a year, among the highest Direct Normal Irradiation (DNI) indices in North Africa. This ensures that Egypt is both a stable and productive solar energy hub. The Desertec Project, a high profile European solar energy initiative with a goal of generating up to 15% of Europe’s electricity through giant solar thermal power plants located in the North African desert, recently confirmed it is on track to complete Egypt’s first solar thermal power plant.

Wind energy is being actively pursued in Egypt and the New and Renewable Energy Authority (NREA) has done extensive work over the past 13 years, building a state-of-the-art wind atlas in cooperation with Risoe National Laboratory. Egypt has made strides in developing strong and established wind farms such as Zafarana 425 MW wind farm on the Red Sea and 2 MW wind farm in Hurghada.

LocationEgypt has access to large key markets through various multilateral and bilateral trade agreements with the USA, European, Middle Eastern and African countries, which secures benefits to Egyptian-based producers supplying these markets.

• EU-EgyptAssociationAgreement• EFTA(Iceland,Liechtenstein,Norway,

Finland)• GAFTA• Agadirdeclaration• EgyptTurkeyFreeTradeAgreement• COMESA• QualifyingIndustryZones(QIZ)

Key global markets in Europe, the Middle East, Africa, and the Indian subcontinent are all readily accessible from Egypt. Closer to the European and North American markets than other major exporters including India, China, and the Philippines, Egypt is also located on key international logistics routes. The Suez Canal is considered to be the shortest link between the east and the west due to its unique geographic location. More than 8% of the world’s maritime shipping passes through the Suez Canal each year. Vessels transiting through the Suez Canal from east to west or from west to east make significant savings in distance, time, and operating costs. The canal revenues for the fiscal year 2010/2011 have reached US$ 4.9 billion

THE SHAPE OF EGYPT


Canada11–12 hr

USA12–13 hr

Brazil12–13 hr

South Africa8–9 hr

Dubai3–4 hr

Beijing9–10 hr

Tokyo12–13 hr

London4–5 hr

Germany3–4 hr

Egypt


Egypt has 77.76 million mobile subscribers (August 2011) growing at 1.74 % from the previous month with annual growth at 29% while mobile penetration is at 96 %.

As for the Internet, the Ministry of CIT revealed that there are 26.54 million internet users (August 2011) growing at 2.59% monthly and 21.36% annually.

The number of internet mobile subscribers is growing: as of July 2011 12.28% of mobile subscribers use internet via mobile handsets, that is around 9.55 million mobile internet users. ADSL subscribers are 1.64 million.

Egypt’s CIT businesses cover the entire sector. Call centers based in Egypt serve customers worldwide at all ends of the value chain. Software developers produce Arabic-language products for major global software packages and plug-ins for popular English-language programs from Adobe and Microsoft, to name just two. A research-based technology house created part of the global WiMAX standard, while niche businesses conduct research and data mining operations, and still others focus on telecom and infrastructure projects. The total number of direct employees in the CIT sector reached 207 thousand employees in 2011. There is an annual growth rate of 12.1% in the number of companies operating in the CIT sector in Egypt, totaling 4,215 companies in July 2011.

BOOMING CIT SECTOR

The Youth Revolution of January 25th showed the world the power of technology.

Egypt is a regional powerhouse of CIT innovation.

Egypt is served by three mobile networks, Mobinil (a joint venture between Orascom Telecom and France Telecom’s Orange), Vodafone Egypt, and Etisalat. All three networks are at least 3.5G. Telecom Egypt, the nation’s fixed-line player, will face competition for the first time from a network that will also have the right to offer WiMAX services. Wireless and wireline broadband cover every major urban center in Egypt.



• Egypthasalargeskilledandtalentedlabor pool (26 million). For decades, Egypt has had a reputation as a net regional exporter of educated, skilled labor. However, as domestic demand for skilled labor rises, young people are increasingly choosing to pursue opportunities at home. Complementing world-class universities and technical schools, a national industrial training center was established in Cairo to provide highly skilled workers to support Egypt’s industrial sector.

• Eachyear,about332,277Egyptiansobtain university degrees, 15,454 of whom are trained engineers and 13,300 have degrees in science and technology. In addition, 22,000 graduate with European language skills including English, French, German, and Italian.

• Thereareanestimated44,631 primary and secondary schools with around 16 million students, 38 public and private universities with more than 1.7 million students, and about 8000 teacher colleges in Egypt. Universities include AUC (American University in Cairo), Cairo University (186,710 students), Ain Shams University, Alexandria University, and the 1,000-year-old Al-Azhar University, one of the world’s major centers of Islamic learning.

13.99

14.41

16.89

1.664.57

4.123.24

2.24

11.63

3.91

3.48

2.63

13.27

3.97

AN ABUNDANCE OF TALENT

WE SAW A NEW GENERATION EMERGE —A GENERATION THAT USES THEIR OWN CREATIvITY AND TALENT AND TECHNOLOGY TO CALL FOR A GOvERNMENT THAT REPRESENTS THEIR HOPES AND NOT THEIR FEARS.President Barack Obama

AgricultureMining and petroleumManufacturingInfrastructureConstructionTransportationCITSuez CanalWholesale and RetailFinancial ServicesTourismReal EstateOthersServices

GDP Sectoral Breakdown 2009/2010

A diversified economy with a resilient business proposition…


A diversified economy with a resilient business proposition…


• PegasNonwovensSA(PEGAS), a Czech maker of special textiles used in hygiene products and health care, plans to build a factory in Egypt to supply customers in the Middle East. The first production line should have an annual capacity of approximately 20,000 tonnes (depending on the product portfolio) and it is expected to be commissioned in the second half of 2013.

• ThepharmaceuticalcompanyGlaxoSmithKline plc announced that it will invest US$84.7 million in Egypt’s healthcare sector in five years to expand its product portfolio.

• Al-FuttaimGroup will pour in about US$300 million next year to continue construction of its Cairo Festival City project, IKEA and Marks & Spencer stores.

• InApril2011,theKuwait Investment Authority(KIA), the Gulf state’s sovereign fund, set up a company with US$1 billion in capital to invest in Egypt’s stock market.

• Electrolux, the Swedish appliance company, acquired a 52% stake in Egypt’s Olympic Group at a cost of US$350 million.

• OnApril19,China Development Bank signed a memorandum of understanding and cooperation with Commercial International Bank and Commercial International Investment Company in Egypt together, in an attempt to cooperate on infrastructure and loans for small and medium-sized enterprises.

• InJulytheEgyptianHydrocarbonCompany(EHC) was established, with paid-up capital of US$150 million (LE 900 million), as the first private sector industrial project to be implemented in Egypt at international prices with no subsidies. Total investments of the project include LE 2.7 billion, about US$454 million.

• InJune2011, Cisco announced it will invest US$10 million to seed a sustainable model of job creation and economic development in Egypt. The venture capital investment will be targeted at high-potential small businesses that provide innovative products and services.

FDI IN EGYPT TODAY

There is clear evidence from around the world that the faith in Egypt is still strong.

Building on an aggregate FDI of US$49 billion over the past five fiscal years, in May 2011, the United States and Saudi Arabia announced a total of US$6 billion in support of Egypt.

Many organizations have maintained their commitment to the Egyptian market, and visionary investors across a number of sectors have expanded and reaffirmed their commitment to Egypt.



jOB CREATION AND THE CHANCE FOR GREATER OPPORTUNITIES ARE OF CLEAR IMPORTANCE TO EGYPTIAN CITIzENS. THROUGH THIS INvESTMENT, CISCO IS DEMONSTRATING ITS COMMITMENT TO ASSISTING THE PEOPLE OF EGYPT TO BEGIN TO INvEST IN MEETING THESE NEEDS.OlafKrahmer,PresidentofCiscoEgypt

EGYPT’S COMPETITIvENESS IN THE GLOBAL ECONOMY —AS AN ExPORT AND MANUFACTURING HUB AS WELL AS IN ITS CAPACITY AS A DESTINATION FOR FOREIGN CAPITAL—WILL ONLY RISE AS LONG-TERM POLITICAL RISk IS MITIGATED BY GREATER DEMOCRACY. HishamEl-Khazindar,ManagingDirectorandCo-FounderofCitadelCapitalApril 2011, Press release

THE MOST LONG-SIGHTED INvESTORS WILL TURN EvENTS AS HAvE OCCURRED IN EGYPT INTO AN OPPORTUNITY.StevenWorboys,ManagingDirectorofExperienceInternational May 2011, Property Showrooms.com

vOTE OF CONFIDENCE


THE ACqUISITION OF ENGINEERING AND DESIGN TALENT FROM AN EGYPT-BASED COMPANY IN THE FIELD OF CUTTING-EDGE WIRELESS AND COMMUNICATION TECHNOLOGY IS THE FIRST OF ITS kIND FOR INTEL IN THE MIDDLE EAST. THE ACqUISITION SHOWS INTEL’S CONTINUED LONG-TERM STRATEGIC COMMITMENT TO THE REGION AND ITS APPRECIATION OF ITS YOUNG, GROWING TALENT POOL.

ArvindSodhani,President,IntelCapitalandExecutiveVicePresident,IntelMarch 2011, Intel press release

WE ARE CONFIDENT THAT EGYPT WILL BE ABLE TO OvERCOME THESE CIRCUMSTANCES AND MOvE FORWARD TOWARDS DEvELOPMENT AND PROSPERITY. WE HAvE TO CONTINUE WHAT WE HAvE ALREADY STARTED IN EGYPT, DESPITE THE FACT THAT OUR PLAN WILL BE IMPACTED IN TERMS OF TIME SCHEDULE, BUT WE NEvER THINk OF qUITTING. WE INTEND TO MAINTAIN OUR EMPLOYEES, AND THAT IS SINCERELY PROvED WITH THE REOPENING OF AL qALYUBIYAH STORE jUST TWO WEEkS AFTER THE REvOLUTION.

François Oliver, Makro Managing DirectorMay 2011, Interview with Al Borsa newspaper in Egypt

WE ExPECT A STEADILY RISING GROWTH RATE FOR THE NExT 40 YEARS, AvERAGING 5% PER ANNUM BETWEEN 2010 AND 2050.CitibankReportonGlobalEconomicProspectsin2050March 2011, Zawya.com


In May 2011 GAFI launched reforms for business facilitation• Easyestablishmentofindustrialprojects

due to canceling the required initial approval from the General Authority for Industrial Development.

• Facilitatingproceduresforregisteringforeign company subsidiaries by reducing registration time to only three days compared to between four and six months prior to March 2011, and simplifying procedures and documentation.

• Duetothenewsystem,established as of March 2011, the registration of foreign company representation offices will take only three days compared to 40 days previously.

• Withthelaunchofthesecondphaseofthe electronic establishment (e-payment) project by the end of 2011, the new package makes it also easier to register new companies with GAFI.

• Newexportsandimportsstimuluspackage allows for both import and export certificates to be valid for between 3 and 5 years.

• GAFIispreparingtoopennewbranchesto provide all kinds of services to investors in 10th Ramadan, Gamsah in Al Daqahliyah governorate, Al Minya, and 6th October. The branches will be opened by mid 2012.

• TheofficeoftheFederationofEgyptianChambers of Commerce at the one stop shop in Cairo will have increased powers allowing it to provide services to investors regarding amendments and annual renewals.

Also, GAFI is a member of the “Investment Contracts Committee” that was established in August 2011 and is headed by the prime minister for reviewing contracts between investors and the different governmental bodies, if necessary, in order to resolve any conflicts that may arise between the two parties. The committee board includes the minister of justice, GAFI chairman, head of prime ministry consultants, and a number of expert councils. GAFI strives to attract specialized organizations to invest in major projects in many promising sectors in Egypt. The most important of these are infrastructure, healthcare, education, and tourism. GAFI works to introduce investment mechanisms and systems in these sectors and to present investment maps showing the various opportunities, facilities, and investment privileges in all governorates and across all the attractive service sectors in Egypt. Foreign investments in the planned mega projects will provide many job opportunities for Egyptians, facilitate partnerships with the Egyptian business community, and create added value to the national economy.

MEGA Projects[1]EastPortSaidis located in a great place

on the north entrance of Suez Canal facing three continents.

The integrated development of East

Port Said opens prospects for new development outside the Nile Valley and Delta, with total area of 144 km² (57 km² for the port and 87 km² for the industrial area). Key projects include:

[a] East Port Said Port.[b] New urban city in Port Said. The

total area has about 36,000 acres. [c] The industrial area east of Port

Said—largest industrial area in Egypt 87 km² (20,700 acres).

[d] Agricultural area—reclamation of 60 acres in sahl El-tena region.

[e] Other projects (Suez Canal tunnel in Port Said—electric train crossing the Suez Canal).

[2]UpperEgypt Red Sea Road (Sohag / Safaga)

Upper Egypt-Red Sea Company was established in November 2008 (Egyptian joint stock company); total area allocated for the company is 200,000 acres. Key projects include:

[a] An integrated residential city on an area of 18 million m² (4,300 acres) to provide 24,000 housing units.

[b] Three dry ports in the governorates Assiut, Sohag, Qena.

[c] A sea water desalination plant powered by solar or normal power, serving the coast line from a source of sea water wells.

[3]SpecialEconomicZoneNorthWestSuez Canal

Area of 16.4 km² North West Suez Canal – Special Economic Zone (Sokhna).

Attract the private sector to develop the first phase of the project with an area of 6.8 km² to manage, operate and maintain the infrastructure and utilities, and promote the Zone. The Chinese

SUPPORT AND INCENTIvES FOR INvESTORS


Company “TIDA” has been contracted for developing phase one of the project.

Small and Medium Enterprises (SME)GAFI designed and is currently implementing a comprehensive strategy to promote and encourage the Small & Medium Enterprises (SME) with a special emphasis on mobilizing both domestic and foreign investment as well as enhancing job creation.

The Bedaya Center strategy revolves around four main pillars:

[1] Provide business development services for SMEs through establishing BDS units at the governorates level.

[2] Facilitate SMEs’ access to finance through establishing number of private equity/venture capital funds dedicated to ensure the growth of SMEs.

[3] Entrepreneurship skills development program geared toward instilling the spirit of entrepreneurship among the youth and supporting SME start-ups.

[4] Establish an SME portal and data website to facilitate the process of business development.


Thanks go to “The Youth” and to all Egyptians for giving Egypt the chance to enjoy a better future. Yet, the road ahead is not easy; Egypt will face difficult days. However, we are confident that theEgyptianeconomy’sresilienceiscapable of overcoming these economic challenges as it did in the 2008 financial crisis, and long-term investors will see many opportunities.

The clear message is that Egypt has started its transformation to a stable, democratic and modern economy, where the dividends of growth and prosperity will be shared by all who participated in its achievement. This is a call for you to participate with the Egyptians in making a new chapter in history.

THE FUTURE OF EGYPT


General Authority for Investment and Free Zones3 Salah Salem St. Cairo – Nasr City, Cairo 11562, EgyptTel.: +202 2405 5452 Fax: +202 2405 [email protected]

Please contact GAFI for more information. Tel.: +202 2405 5452 Fax: +202 2405 5618email: [email protected]

www.gafinet.org

INvEST IN EGYPT

Documents

CHANGE FOR A NEW EGYPTenergy hub. The Desertec Project, a high profile European solar energy initiative with a goal of generating up to 15% of Europe’s electricity through giant