The European Bank for Reconstruction and Development (EBRD) prepares for a new €200m framework for Egypt’s tourism sector in the next period, the EBRD’s Vice President of Banking, Alain Pilloux, said.
“The idea behind this framework is to design a product that has green aspects, which is very important for the hotel sector. We also want to invest in projects that have an inclusion aspect supporting employment and training of young people and women,” Pilloux added.
Pilloux visited Egypt from 9 to 13 February 2020 where he met with senior governmental officials, launched the Bank’s activities in Ismailia, and attended the Bank’s celebration ceremony of EBRD Women Corporate Directors Certification Programme last Thursday.
Daily News Egypt sat down with Pilloux to learn more about the outcomes of his discussions with the Egyptian government as well as the Bank’s future plans in the local market in terms of new investments and offices, transcript of the interview is below, lightly edited for clarity;
I know you met with senior governmental officials during your visit; What were the outcomes of these meetings?
One of main purposes of my visit to Egypt was to open the EBRD’s new office in Ismailia. Now we have three offices in Egypt, the first and main one is in Cairo, we have another office in Alexandria, while the most recent one in Ismailia.
We expect to open a new office in Assuit next year to better cover Upper Egypt while the Ismailia office will serve Port Said, Damietta, Suez, and Sharkia governorates.
These new offices will focus on offering advice to the small and medium enterprises (SMEs) through the EBRD’s Advisory for Small Business Programme (ASB).
In the opening ceremony of the Ismailia office, I was very happy to see many businesspersons attending the ceremony while half of them were women, which was really very inspiring to me.
I also met with the Prime Minister, Mostafa Madbouly, over my visit to Egypt where I reconfirmed EBRD’s commitment to support the Egyptian economy.
We invested about €1.2bn in the Egyptian market last year, 74% of that was for the private sector, which is very important due to the private sector’s key role in creating jobs for all the young people who are entering the job market every year.
It’s not easy to absorb these new entries in Egypt’s job market, so supporting private sector is a central objective for us.
We reconfirmed our commitment to do more for SMEs through the Egyptian banks. We have relationships with 13 banks in Egypt. We lend these banks and then they lend the SMEs. We lend them for various purposes including financing women and young people in business.
We have agreed to support these categories with the National Bank of Egypt (NBE) at the end of last year. We also support SMEs in the green economy. We aren’t able to reach huge numbers of Egyptian companies by our own, so we reach them through the banks in Egypt, yet sometimes we do the finance directly when its large enough.
We have a large presence in Egypt’s energy sector as EBRD is the largest investor in Benban Solar Park project. Benban is fully operational and connected to the grid. We will be looking in further developing renewable energy projects in Egypt helping the country diversify its energy mix and becoming greener.
There is a sector that has really done well in the last few years, which is the tourism sector after having recovered high levels of revenue last year, with $12.5bn. We are preparing a €200m tourism framework in Egypt.
Will this framework be with the private sector or the government?
98% of the tourism sector in Egypt is private, so our new framework will be 100% in this activity.
As part of your future plans in the tourism sector; will you support the service areas around the Grand Egyptian Museum (GEM)?
If we find an opportunity to support the services provider around GEM, we will do it. We are looking at every single opportunity.
Madbouly is very keen on our contribution to the private sector, especially in the construction of infrastructure through the Public Private Partnerships. PPP is growing in Egypt. We prepared the PPP for the 6th of October Dry Port Project.
Madbouly requested that we participate in the construction of desalination plants in the coastal areas with the presence of the private sector, which is a very important objective.
The desalination plants will supply part of the country’s water needs in the future, either in the Mediterranean or the Red Sea. We will boost our presence in this sector soon.
EBRD wants to potentially prepare a number of desalination plants on a PPP basis in the same manner EBRD prepared the 6th of October Dry Port Project, which was recently awarded to a large private sector consortium.
What about the outlook of your cooperation with state owned enterprises (SOEs)?
We will boost our cooperation with SOEs. Since we began our investments in the local market, we were involved with 13 SOEs, some of them were about the upgrade of refineries, wastewater, and railways projects.
We work hand in hand with the Egyptian government which wants to be more selective, so we will see their priorities. We are interested in the wastewater sector as it’s a sector where only 30% of the country’s needs are covered.
There are some regions in the country where lots need to be done including in the Suez region, Upper Egypt specially in Aswan and Beni Suef, as well as some parts of Greater Cairo.
We will continue to support the state initiatives where the country’s needs are very large.
Are you interested in buying a share in Banque de Caire?
We are still looking forward to our first investment in the government’s state companies’ offering programme. We study every single business opportunity in the market.
Do you have specific plans for desalination projects in Egypt?
We are still looking at the market and we need to prepare studies and then attract the private sector. For the moment, we don’t have more to say because we’re still at the project’s initial stage.
What do you expect the EBRD’s total volume of investments by the end of this year?
We want to maintain our large investments of last year which were €1.2bn. I hope that our investments will be above €1bn this year.
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the Bank has invested over €6bn in 115 projects in the country. In 2019, in terms of new commitments, Egypt was the largest economy in EBRD regions.