Egypt Keen on Upcoming IPO Program

The Egyptian government has set its sights on raising US$5 billion through the upcoming offering of power plants and state-owned enterprises, a move that aligns with the government's initial public offering program, as revealed by a report from the Cabinet’s Information and Decision Support Center.

Scheduled to commence in October 2023 and continue until the close of June 2024, this initiative underscores Egypt’s push to expand its economic horizons through the strategic sale of stakes in various entities.

Ahram Online reported that the Egyptian strategy entails the partial privatization of key assets, including stakes in the Siemens Beni Suef power plant, Gabal El-Zeit wind power plant, and Zafarana wind farm. Additionally, ownership stakes in the military-owned companies Safi and Watanya are also slated for the offering.

This comes as the Egyptian government collected US$5 billion by divesting stakes in 13 enterprises between March 2022 and July 2023.

Aligning with the State Ownership Policy Document, the government intends to present stakes in 35 state-owned firms to strategic investors by the end of June 2024.

A list of 32 companies was unveiled in February 2023, subsequently augmented later this year by the addition of Eastern Co., Al Ezz Dekhila and Telecom Egypt.

This push toward IPOs underscores Egypt’s strategy to enhance its economic landscape and reinforce the engagement of private investors in the country’s growth journey.

In another development, Egyptian President Abdel Fattah El-Sisi announced that the country will receive a US$3.5 billion investment from British multinational oil and gas company BP over the next three years.

The announcement came after a meeting between El-Sisi and BP CEO Bernard Looney in the presence of the Minister of Petroleum and Mineral Resources Tarek El-Molla on Monday.

The president highlighted Egypt’s desire to strengthen cooperation with the British company, including in emissions reduction, energy transition and green hydrogen production.

The Egyptian government’s plan to sell stakes in public companies was announced more than five years ago, but the process gained new urgency since the Russian invasion of Ukraine.

The war triggered heavy foreign investment outflows from the Egyptian financial markets and threw the African country’s economy into crisis.

In December last year, Egypt agreed to a US$3 billion rescue plan with the International Monetary Fund with the expectation that the state withdraws from some non-strategic sectors of the economy to allow space for the private sector to grow.