World Economy

Egypt for sale? $60B aids 'new era' for nation


The security was heavy, the schedule overran and the refreshments were scarce but Egypt's attempt to bring money back to the country has been met with relative success, according to its new political leadership.

President Abdel Fattah Al-Sisi - who has served just nine months of his current tenure - detailed $60 billion of direct investment and soft loans at its Economic Development Conference in the resort of Sharm el-Sheikh.

Already receiving the help from Kuwait, Oman, Saudi Arabia and the United Arab Emirates (UAE), the event was a chance to showcase a series of investment opportunities within Egypt's private sector with the aim of creating jobs for Egypt's young people who have been shaken up by four years of political turmoil.

Sharm el-Sheikh, frequented by holidaymakers on package deals and apache helicopters from the nearby naval base, welcomed in more than 1,500 delegates from 52 countries with 30 heads of state making an appearance. A press release on Sunday said that number had grown to 3,500 delegates and over 50 heads of state.

$60 billion weekend

CEOs on investing in Egypt

Out of the $60 billion announced by Al-Sisi, over half were direct investments, $18.6 billion were from engineering, procurement and construction contracts and there were also $5.2 billion of loans from what organizers called "development partners." Donations from its Middle Eastern neighbors made up the extra $12.5 billion.

Oil major BP sealed a $12 billion gas deal at the weekend. CEO Bob Dudley told CNBC the time was "absolutely right" to invest in Egypt, despite volatility seen in global energy prices. Joe Kaeser, CEO of Germany's Siemens, told CNBC that it had struck an agreement to build a power plant, more wind power generation capacity and a wind rotor blade factory in Egypt, adding that the deal had even been overseen by Al-Sisi himself.

Meanwhile, General Electric said it planned to spend $200 million building a factory in Egypt and U.K.-based BG Group signed a $4 billion gas deal. UAE's Masdar teamed up with Saudi Arabia-based ACWA Power and the Egyptian Electricity Holding Company (EEHC) to explore the idea of renewable and natural gas projects. Italian multinational Eni penned a deal worth an estimated $5 billion.

The Islamic Development Bank also agreed to finance four priority development projects in Egypt worth $800 million and Naguib Sawiris, the chairman of Orascom Telecom and Media, told CNBC he was putting $500 million into his native country over the next few years.

All told, $35 billion worth of investment projects were to be offered up, according to reports before the event, with the development of the Suez Canal and a new administrative city on the outskirts of Cairo just two of the main focal points.

Egypt for sale?

Egypt open for business

Al-Sisi was the former head of Egypt's armed forces and was an instrumental figure in the government that took over power from Mohamed Morsi, a leading member of the now-banned Muslim Brotherhood organization.

Morsi's supporters denounced the move as a military coup and have been scathing of the event which has been billed by Al-Sisi as a key milestone in the country's economic turnaround. The Egypt Anti Coup Pro-Democracy Alliance, a pro-Morsi opposition group, released statement over the weekend claiming that the new government is selling Egypt to the "highest bidder."

Mohamed El Dahshan, a senior cooperation officer at the African Development Bank and a member of the Tahrir Institute for Middle East Policy (TIMEP), believes that the success of the event will only be known in the longer term and whether it met the development aspirations of the average Egyptian.

"(The government should) be clear that while the conference could represent an important stepping-stone to regaining investor confidence, the road to prosperity is still long," he wrote of the TIMEP website on Friday.

Al-Sisi, himself, doesn't seem to be believe the job is anywhere near done either. In a closing statement Sunday, he told delegates that: "We're in a hurry, we need to run faster," adding that the conference would become an annual event.