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» Key facts

» Political milestones

» Economic Review

» Demographic Trends

» Egypt Compared to the Region

» Foreign Interests in Egypt

» International Financial Institutions

» Examples of Planned Private Investment

» Present Dutch Interests in Egypt

» Concluding remarks2

The Arab Republic of Egypt

» Area: 1 mn km2

» Population: 90 mn

» GDP: $255 bn (2013)

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• Natural Resources: oil & gas (70% self sufficiency), renewable energy,

minerals

• Location: Strategically located between high purchasing markets of Europe and

Gulf. Transport corridor between Mediterranean sea and Indian Pacific ocean.

• Fourth largest economy in Arab world after KSA, UAE and Algeria

• Huge market: 90 mn people

• Work force: Educated, skilled, moderate cost, majority of population is young

• Party to many bilateral and regional trade agreements

• Suez Canal: 8% of global maritime trade, turnover $5,5 bn

• Tourism: Long term global destination for cultural and leisure tourism.

• Oversees Remittances $18 bn in 2013

Egypt has the most diversified economy in the Middle East

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GDP

• $255 bn

• $3,000 per capita

• 2.1% growth Rate (FY2012/13)

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• Unemployment 13.3%

• Annual Headline Inflation 11.4%

• Public Budget Deficit 14% of GDP FY2012/13, 12% expected FY2013/14

• NIR - May 2014 $17,3 million (covers 3 months imports)

• BOP Surplus $2.2 bn (July/March 2013/14)

• Trade balance $-25 bn deficit in FY2009/10

$-33 bn deficit in FY2012/138

• Total FDI reached $5.2 bn in

2012/13 from $8.1 bn in

2008/09.

• FDI has fallen dramatically

after 2011 revolution. After

2012 we see FDI picking up

again.

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Netherlands is the 2nd largest EU investor and the 7th internationally (Accumulative data since 1970).

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Main EU investors in Egypt

» The Netherlands is the fourth largest EU exporter to Egypt after Italy, Germany andFrance with exports of €1,276 million (2013)

» The Netherlands is the seventh largest EU importer from Egypt after Italy, Germany,France, Spain, UK and Greece with imports of €331 million (2013)

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» Morgan Stanley confirms

confidence in Egyptian Stock

Exchange (EGX), keeps it in

Emerging Markets Index due to

positive market developments.

» Benchmark index EGX 30

increased 85% since 30th June

2013. EGX 30 value was 4,752

in 30/6/2013, recorded 8,746 in

12/6/2014.

» Market Capitalisation is

currently $66 bn down from

$139 bn in 2007

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» GDP growth was 7.2% before the global financial crises; expected

to recover to 5.5% in 2017/18 (Source: EIU).

» IMF forecasts economic growth 4.3% in 2015; GoE estimates is

3.2% for 2014/15.

» Goldman Sachs includes Egypt in top 11 countries from which

global growth will come in 15 years.

» World Bank expects Egypt to rank 15th globally by GDP in 2050

ahead of Canada and Italy.

» Investment opportunities exist across a wide range of sectors

(agriculture, transport, water, oil & gas, education & training,

energy, engineering, ICT, retail, financial services, life sciences and

security equipment). 13

» Energy crisis (blackouts, inefficient usage, slowdown natural gasproduction)

» Fiscal balance (budget deficit, reliance on aid and grants)

» Subsidy schemes (1/5 of budget, not directed to needy, social sensitivity)

» Solvency crisis (Lack of hard currency, black market, delayed payment ofobligations, etc.)

» Business and investment climate (complicated government procedures,changes in legislations, contract enforcement, tax conflicts, protectinginvestors etc.)

» Stability / security (dropped credit ratings, demonstrations and strikes,increased crime rates, etc.)

GoE is aware of these challenges and has started to rebuild the country by:o Economic reforms started by reducing energy subsidies.o Major efforts to improve security.o Legislative reform to encourage investmento Use of International Advisory services (multilateral and private)

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» Most populous country in the MiddleEast and North Africa

» Population: 90 million (May 2014)expected to reach 150 million by2035

» Growth rate: 2.8%

» 50% population is under 25 yrs

» 45% of population live on less than$2/day

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Compared to other countries in the Region:

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» USA: 2 missions to Egypt (infrastructure and safety), 1 ministerial visit (Foreign Affairs).

Relieving $1 bn of Egypt’s debt for new educational and economic projects. Providing

$1.7 bn in loans for infrastructure projects (water and transportation sectors) and SME

support. Annual $1.3 bn military aid. In addition to training and investing in people

initiatives.

» UK: 3 missions to Egypt (SCC, Waste Management, energy) and 3 events (tourism,

nursing, banking), 1 Ministerial visit to the UK (education) and 3 events about Egypt in the

UK (investment, ports and multi-sectorial)

» France: French Development Agency to provide €1.2 bn for financing the third phase of

Cairo's third metro line Sep 2014. Financing € 95 million for SMEs projects.

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» Italy: Italy is granting a € 45 million credit line Egyptian and Italian small and medium-

sized enterprises (SMEs) with projects in Egyptian industry, food and services sectors.

» China: Contracted new tunnel to Sinai under Suez canal; Negotiating electrified new rail

line between Cairo and Alexandria (220 Km); Negotiating new Tram line (urban transport)

in Greater Cairo.

» South Korea: Egypt – South Korea Business Forum to launch in Aug 2014 (Energy,

Chemicals, Transport, Construction, Electronics)

» Russia: Two Egyptian mission to Russia (Aug 13 & Feb 14) and one mission to Egypt

(Nov 13) to discuss military cooperation. A Russia-Egypt intergovernmental commission

on trade and economic cooperation was formed and a $2 bn arms deal finalised.

» UAE: Khalifa Fund to provide loans of $400 million to finance small, micro

and medium enterprises in Egypt. 18

Has a portfolio of over € 900 million; current projects include:

» Education and TVET (€ 220 million)

» Health (€ 110 million)

» Water (€ 116 million)

» Energy (€ 110 million)

» Emergency employment € 70 million (Social Safety Net )

» Transport (€ 80 million)

» Environment (€ 40 million)

» Socio-economic development and Civil Society (€ 90 million)

» Business Development and Trade (€ 64 million) 19

EIB Portfolio for 2009/2014 is €1,7 bn:

» After 2011 investments 200-250 million/year, top year 2010 (€ 900 million)

» Energy, € 865 million

» Oil/gas (2010), € 346 million

» Transport (2012/13), € 250 million

» SME credit (2013), € 80 million

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EBRD Portfolio for 2013/14 is € 1,25 bn; major allocations are:

» Power € 650 mn

» Transport € 171 mn

» Agribusiness loans € 190 mn

» SME loans € 73 mn

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WB current portfolio in Egypt is $4.9 bn: (through IBRD and IDA)

» Power $2,177 mn

» Finance $900 mn

» Transport $880 mn

» Social sectors (health, education and employment) $418 mn

» Water and sanitation $416 mn

» Agriculture $100 mn

» Environment $27 mn

Additionally IFC, part of WB group, has total commitments in Egypt since 2011

close to $1 bn. IFC mission is private sector development.22

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Current portfolio consists of 27 projects with ongoing commitment of Euro 1.4 bn:

• 7 public sector loans (87% of ongoing commitments)

• 3 private sector loans (12% of ongoing commitments)

• 17 grants (1% of ongoing commitments)

Ongoing commitment by sector:

• Power (80%), finance (12.2%), water and sanitation (4%), social (3.6%), and agriculture (0.2%)

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Nationality Name of the company Amount of investment

Timing of the investment

Type of investment Employment

NL Shell USD 402 million 2014/2015 Budget

Investment in Badr El Din Petroleum Company used in excavation, exploration, development and establishment of new production facilities

NL Orascom Construction BV USD 300 million to support real estate developers including Emaar Misr& Palm Hills developments

Int'l Coca Cola USD 500 million in 3 years time

new factories 12000

Int'l Chipsy USD 64 million in 5 years time

new production line 9000

USA Apache Corporation $24 million Oil & gas exploration

UK British Dragon Oil $39 million Oil & gas exploration

Gernmay Porsche Automobiles EUR450,000 Construction of dealerships in Egypt

Korea Samsung EGP 1.7 bn 2014 transform its Upper Egypt plant into an integrated LED screen production center

Russia New Russian Industrial zone Renovation of Helwan Iron & Steel Factory, Renovation of Nasr Automotive Company

Italy EUR 45 million to finance small & medium-sized enterprises (SMEs) in Egypt

Japan JICA EUR 260 million (loan)

to be repaid over 25 years

to establish a new wind farm plant in Suez Gulf Area

Japan Panasonic EGP 200 million Over 2 years Establish a new factory in Bani Suef to produce an export home appliances

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Nationality Name of the company Amount of investment

Timing of the investment

Type of investment Employment

Russia Gazprom Neft-Lubricants Distributorship agreement with GB Auto

to include lubricants and other products to the automotive market in Egypt

UAE Emaar EGP 8 bn establish the largest commercial, office and housing center in Cairo

UAE Al-Futtaim EGP 16.5 bn in 5 years time Commercial Malls 38000 opportunities

UAE Collaboration between United Arab Shipping Company & Holding Company for Inland and MaritimeTransport

USD 760 million to establish a container handling facility

UAE Financial Aid of EGP 20 bn EGP 20 bn constructing 50,000 residential units, completing sewage projects in 151 villages & building 100 new schools

UAE Khalifa Fund for Enterprise Development USD 200 million (loan)

to be repaid over 15 years

to finance SME-projects in Egypt

China China Harbor Engineering EGP 3 bn (loan) to finance Ismailia governorate's "Thalatini tunnel" project.

Gulf Countries Al-Ahly for Real Estate + Saudi Group Al-Rabeaat

EGP 1.2 bn residential project in New Cairo

KSA Almarai Dairy Company USD 345 million Over 5 years expansion of its subsidiary “Bayti” existing factory in addition to establishing new plant for juices and dairy products

KSA Saudi Egyptian Construction Company (SECON)

USD 245 housing project to establish large number of med-income housing units in three different cities.

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» Egypt has a long term potential for economic development and offers animportant market for Dutch companies.

» Clearly Egypt has its challenges, however, the present government is aware ofthe problems and has started economic reforms.

» Many countries, in the gulf region but also in Europe, Asia and the US, areshowing interest in Egypt for investment and trade.

» The large international companies are ready to increase investments if thepresent trend of reforms materialises and security further improves. Nocompanies have withdrawn.

» Investments are picking up and stock market has recovered, reflectingimproved investors confidence.

» Large investment projects, like the Suez Canal Corridor, offer opportunities forDutch business.

» Now is the time to get reconnected.

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