Egypt now has “100% commitment from the top” to deliver on its PPP pipeline, says the government's PPP director.
Atter Hannoura, director of the PPP Central Unit at Egypt's Ministry of Finance, says several years of a more stable cabinet since the Arab Spring has enabled the government to galvanise the “necessary political will” to deliver on PPP ambitions.
“The current PPP programme is personally supported by President Sisi… we are enjoying support from the top,” Hannoura explains, adding that there is a more comprehensive understanding of the benefits of PPPs within today’s cabinet.
The PPP director says that Egypt’s commitment to the IMF following a 46-month, $3bn loan in December 2022 is also catalysing the country’s drive towards privatisation.
The IMF loan is designed to help unlock Egypt’s growth potential through structural and governance reforms. The programme includes policies to reduce the state’s footprint and enhance transparency for improved trade facilitation.
“We now have a mandate to drive through economic reforms,” Hannoura says, speaking on the sidelines of the PPP Mena Forum in Cairo. “We have committed to making private sector involvement a much higher priority within our economy.”
Hannoura believes that PPPs will be utilised to lessen Egypt’s gaping budgetary deficit.
“We have a deficit and there is also a big gap between the infrastructure we have and the infrastructure we need. There is a lot of room for the PPPs to surface and fill this gap.”
Hannoura notes that the PPP MENA Forum has historically been held in Dubai, but this year the was moved to Egypt.
“This time the conference is state-sponsored [by Egypt]. I have been very focused on changing the agenda to discuss the real practical issues of getting deals done.
“We have added another level of sophistication to the panels and we also have representatives from all the regional countries, discussing important matters like transportation, water and health, and explaining their pipelines.”
Hannoura says he “doesn’t really have a problem” attracting PPP investment, instead, other challenges are more pressing.
“The main issue is that the investors are always in a hurry and the structure of the project needs time.”
Hannoura emphatically highlights the need for well-structured projects.
“Projects are only bankable when their structures are robust and rock-solid. When I work with advisors, I don’t leave them alone… constantly challenging the deliverables is very important, you have to challenge each and every figure. You have to be able to trust it.
“Before I go to the private sector, I have to work out the financial and technical risks. And this risk can change from day to day.”
And while Hannoura acknowledges Egypt’s currently economically precarious conditions, he insists the country’s risk is bankable.
"Eight months back, things were much more stable in Egypt. The currency has plunged. Now we are redoing the calculations. But it can still be worked out – it’s all about balance and being well structured.
“If you look at some of the deals being done in African countries, the risk is enormous but then the payback is enormous. The more risk, the more profit. And that applies to Egypt too. You have to balance risk and profitability.”
Hannoura advocates transparent contracts, balanced risk, and well-structured frameworks as the foundation of fruitful PPPs. “It’s possible to create a win-win agreement without giving away everything we have and our state assets.”
Following the success of Egypt’s dry port PPP project in Sixth of October city, which opened in December 2022, Egypt'’s next dry port PPP project - in Tenth of Ramadan city - is expected to begin receiving bids in April 2023.
Hannoura is confident this will be only the start of a long and stable pipeline that will be able to attract a wide range of international investment for Egypt.