Fitch Ratings affirms Egypt’s IDR at B+, revises outlook to Negative

Newsletter

08 Nov 2022

Fitch Ratings affirms Egypt’s IDR at B+, revises outlook to Negative. Fitch Ratings has confirmed Egypt’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’, revising its outlook to Negative from Stable. The outlook revision reflects a downturn in Egypt’s external liquidity position and a slip in prospects for bond market access. This makes the north African country vulnerable to unfavorable conditions in a time of high current account deficits (CADs) and external debt maturities. (Asharq Business)

The country’s ratings are likely to remain above ‘B’ on the back of robust economic growth at 4.5% in fiscal year (FY) 2022/2023 and FY 2023/2024
Following 6.6% in FY 2021/2022, Fitch projected, noting that “tighter monetary conditions and funding availability pose significant risks to growth.” Fitch Ratings expected devaluation to keep the country’s debt-to-GDP ratio high at around 87% in FY 2022/2023, with debt likely to fall gradually afterward due to projected growth in primary surplus and nominal gross domestic product (GDP). Moreover, Egypt’s current account deficit is forecast to narrow to 3.1% of GDP in FY 2022/2023 on the back of higher shipping fees by Suez Canal and a further improvement in tourism, the rating agency added. (Asharq Business)
Madbouly, Bloomberg mull hosting investment conference in Egypt next year.
Prime Minister Mostafa Madbouly met with the American businessman and politician Michael Bloomberg to discuss the possibility of holding a conference to promote investment opportunities in Egypt. The potential conference could be held in April or May 2023. Egypt aims to benefit from the expertise of Bloomberg in promoting the conference to attract major global companies to attend the anticipated conference. Moreover, Michael Bloomberg praised the organization of COP27, noting that his participation in the conference allowed him to visit Egypt for the first time. (Arab Finance)
Egypt issues 100 EGP commemorative coin to mark COP27.
The Public Treasury and Coinage Authority issued an EGP 100 commemorative coin on the occasion of the 2022 United Nations Climate Change Conference (COP27). The authority does not hesitate to mint commemorative coins that mark historical events and key national projects to show the whole world Egypt’s unprecedented achievements across various fields. (Hapi Journal)
Egypt launches EVs charging system in Sharm El-Sheikh.
Ministry of Transport has launched a system for managing and charging electric vehicles (EVs) in Sharm El-Sheikh. The system extends across 18 locations consisting of 106 points of charging with 150 EVs. The launch of this system paves the way for announcing the localization of EVs in Egypt, which will begin with assembling the cars, followed by the manufacturing stage. The assembly of EVS has already begun in the country through a collaboration between Mansour Group and General Motors. (Al Mal)
Egypt carries out 16 new projects to achieve sustainability.
Ministry of Petroleum and Mineral Resources is currently implementing 16 new projects to achieve sustainability and reduce emissions in 13 companies. The 13 companies are El Nasr Petroleum Company, Alexandria Petroleum Company, General Petroleum Company, Amreya Petroleum Refining Company (APRC), Cairo Oil Refining Company, Khaleda and Qarun, WEPCO, Amal Petroleum Company, Agiba Petroleum Company, North Bahareya Petroleum, PetroSilah Petroleum Co, and PetroSennan. The projects target reducing emissions estimated at around 584,000 tons of carbon dioxide. (Al Mal)
Belgian consortium to build green hydrogen production center in Egypt.
A Belgian consortium of companies specialized in the field of energy and green hydrogen is planning to build a green hydrogen production and storage center in Egypt at the Mediterranean Sea. The consortium, which comprises DEME Group, Fluxys, and Antwerp Port, has set a feasibility study for the project. Moreover, the Belgian consortium plans to set up 500-megawatt electrolysis devices near Gargoub Port in Marsa Matrouh, and its production will be exported to Europe. (Arab Finance)
Egypt’s GAH, AstraZeneca ink MoU to promote green, healthy buildings.
The Egyptian General Healthcare Authority (GAH) signed a memorandum of understanding (MoU) with AstraZeneca Egypt to promote the concept of green and healthy buildings. This marks the second cooperation between GAH and AstraZeneca after the collaboration in the medical insurance through launching EHA Field Hospital in the green zone of COP27 to ensure providing high-quality medical services. (Al Mal)
GCC, international funds own 45% of CIRA Education.
GCC funds, including the Saudi Public Investment Fund (PIF), own around 15% of Cairo Education (CIRA), while European and American funds hold 30% of the company. The company plans to open the first phase of the Technology University in September 2023 with investments of around 700 million EGP. (Al Mal)
Chimera Capital enters the private credit space.
Our friends at Chimera Capital have launched a 2 billion USD global private credit fund with US alternative asset manager Alpha Wave Global. The fund will primarily lend senior secured, floating-rate private loans to private companies in the US, Canada, UK, EU, and Australia. This comes as the global market share for private credit funds increases as they eat into banks’ market share amid an environment of high interest rates and aggressive monetary tightening. (Bloomberg)
Online butcher Brotinni raised 600,000 USD in a seed round.
Founded in 2020 by CEO Dalia Abou Omar (LinkedIn), the startup sells fresh meat and poultry as well as frozen ready-to-cook products for home delivery. The company recently inaugurated its first fulfillment warehouse, piloting the dark store / kitchen concept for the meat industry. Brotinni currently operates in Greater Cairo, and has plans to open more “dark butchers” to serve customers in other parts of the country. (WAYA)
TAQA Arabia’s unit receives 5.5 million USD loan from EBRD, GEF.
TAQA PV, a subsidiary of TAQA Arabia, has secured 5.5 million USD in financing from the European Bank for Reconstruction and Development (EBRD) to finance the construction and operation of a 7-megawatt peak (MWp) solar photovoltaic (PV) project in El Minya. The financing includes a 4.95 million USD loan from the EBRD and a 550,000 USD concessional loan from the Global Environment Facility (GEF). The project will sell all of its electrical output to ASCOM Carbonate and Chemical Manufacturing (ACCM) under a 25-year power purchase agreement. (Arab Finance)
Mastercard, AAIB team up to accelerate digital transformation in Egypt.
Mastercard has entered a strategic partnership with Arab African International Bank (AAIB) to accelerate the digital transformation process in Egypt’s financial ecosystem. The long-term partnership will pay attention to the implementation of AAIB digital transformation strategy. Under the partnership, Mastercard and AAIB will offer state-of-the-art payment solutions that serve the increasing consumer demand for convenient and safe digital payment methods. (Arab Finance)