EUROPEAN UNION DELEGATION TO EGYPT

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1 EUROPEAN UNION DELEGATION TO EGYPT COOPERATION FLASHNOTE June/July 2013 Highlights Mission to South Sinai Governorate EU PPP Conference EU NIF Small Business Support Programme Business Climate Development review Deauville Partnership Regional Investment Forum Egypt Innovation seminar Agricultural development in Egypt Food Security in Egypt Field Visit to Kom Ombo Concentrated Solar Power Plant

2 Mission to South Sinai Governorate EU Ambassador James Moran went to South Sinai Governorate accompanied by the Head of Finance and Contracts and by the Sector Manager. The visit took place from the 4th to the 6th June The team visited some of the South Sinai Regional Development Projects (SSRDP): (1) the "Solid Waste Management Facility" in Sharm El Sheikh, (2) the "Economic Rehabilitation of People with Special Needs" in El Tur, (3) the "Women Empowerment Centre" in El Tur, (4) the "Integrated Social and Economic Development of South Sinai Bedouin Communities" and (5) St Katherine Monastery. H.E. James Moran met with South Sinai Governor and discussed outstanding issues related to the SSRDP and the exploration of further areas of cooperation with the governorate of South Sinai. Pierre Destexhe

3 EU Private Public Partnership (PPP) CONFERENCE In the framework of the Transport Sector Policy Support Programme funded by the EU, the Delegation of the European Union in Egypt and the Egyptian Ministry of Transport (MOT) organized on June 20 the first conference on public private partnership potential transport projects under the theme " Egypt: A Strategic Investment Destination". Experts and investors from international and local finance and investment companies and organizations as well as international development organizations attended this conference. Potential investment opportunities in Egypt's transport sector were discussed and a large number of transport projects presented. A session was dedicated to financing modalities where the Organization for Economic Co-operation and Development (OECD) presented the EU funded Investment Security in the Mediterranean Region (ISMED) regional project. Representatives of the Egyptian Ministry of Finance presented the Sukuk funding as well as the situation regarding PPP projects in Egypt. The 1st annual MOT PPP is sponsored in part by the confederation of Egyptian European Business Association (CEEBA) and Federation of Egyptian Chambers of Commerce (FEDCOC). Ore information about this event can be found on the following link: Ahmed El Beltagui

4 Business Climate Development review In the context of the ongoing Organization for Economic Co-operation and Development (OECD) update of Egypt's Business Climate Review, funded by the EU Delegation, the General Authority for Investment and Free Zones (GAFI) hosted two stakeholder workshop during the month of June. The update of the 2009/2010 review (which included 12 policy areas) covers investment policies and promotion as well as public-private partnerships. A final workshop to discuss the findings and recommendations of the chapter on investment policies and promotion with local public and private stakeholders took place on June 6. The EU Delegation participated as an observer. The chapter was subsequently concluded by OECD, and is awaiting final approval by GAFI. Some of the key issues analysed include restrictions to national treatment, approval procedures, guarantees against expropriation/cancellation of contracts (including privatisation contracts) and international arbitration and amicable settlement. On June 24 EU economic and trade counsellors had the opportunity to discuss the findings and recommendations with the OECD at an informal meeting organised by the EU Delegation. A technical stakeholders' workshop on public-private partnerships took place on June 26. This workshop noted good progress in regulatory/legislative reforms in the sphere of PPPs, but pointed to weak implementation thus far, and once again highlighted the importance of predictable and conducive investment climate as a precondition for successful implementation of PPP policies. The Business Climate Review exercise will conclude in the autumn and the results will be presented at a public event with the Ministry of Investment. Rikka Torppa

5 EU NIF Small Business Support Programme EU Ambassador attend the EBRD launch of the EU NIF funded Small Business Support Programme in Egypt on Tuesday, June 25, while implementation of the support programme has already begun. Small Business Support has already started more than 50 projects to help Egyptian businesses access high-quality business advice, with the European Union providing EUR 2.4 million to the programme. Accounting for more than 90 per cent of the private sector, small and mediumsized businesses are a fundamental part of the Egyptian economy. As such, strengthening this area is a top priority for both EU and EBRD activities in Egypt. Smaller businesses continue to suffer from poor access to finance, limited managerial skills and low productivity, greatly hampering their job creation potential. The EU Head of Delegation affirmed the importance of supporting the EBRD Small Business Support (SBS) programme which can bring tangible benefits for SMEs in Egypt. The track record of this facility in other countries is impressive those benefiting from assistance through SBS have not only increased their turnover but also grown their workforce. There is no doubt that the programme will help meet one of Egypt's most pressing economic needs. SBS connects small and medium-sized enterprises with the expertise that can transform their businesses. Working with local consultants and international experts, SBS gives businesses the tools, skills and know-how to innovate, attract finance and future expertise and become the next generation of business leaders. With expertise in management, marketing, quality management, engineering and beyond, SBS projects help enterprises become fitter, healthier, more prosperous and more resilient. Rikka Torppa

6 Deauville Partnership Regional Investment Forum A Deauville Partnership Regional Investment Forum took place in Cairo on 25 June. The aim is to prepare Egypt for the Deauville Partnership Investment Conference that will be held in London on 16 September. MENA governments in transition, including Egypt, will have the opportunity to showcase FDI opportunities in their countries and highlight steps taken to attract investment. More than 200 participants from the private sector (among whom a good number of Arab investors) and government attended the event. EU Ambassador, James Moran, spoke at the opening ceremony, together with the Prime Minister, the Minister of Investment, the President of the Islamic Development Bank and the UK G-8 Presidency. The EU Ambassador underlined the importance of the EU as a trading partner (1/3 of total trade) and as a foreign investor in Egypt (3/4 of total FDI) as well as the advantages of a possible deepening of trade relations through a Deep and Comprehensive Free Trade Agreement (DCFTA). Current problems faced by EU companies operating in Egypt (physical security, uncertainty of legal & policy framework, energy and water problems, large payment arrears) were also stated. The EU Ambassador welcomed the commitment expressed by the Minister of Investment to address some of the key problems and expressed hope that the new initiatives would bear fruit soon. The Minister of Investment flagged in general terms the key elements of Egypt's new Investment Roadmap, to be unveiled officially on 27 June. The roadmap aims at creating 1.2 mio jobs annually between 2013 and 2020 through a combination of legislative reforms, procedural reforms and incentives, as well as the launching of new mega projects. The Prime Minister reiterated some of the points made by the Investment Minister and highlighted the opportunities offered by Egypt to foreign investors, whilst the Islamic Development Bank focused on the agreements signed with Egypt (some additional ones were signed after the opening ceremony) and the financing opportunities they offer. The Investment Forum provided an opportunity for sharing key recommendations from the EU funded OECD Business Climate Development Review diagnostic work on investment policy, with OECD chairing one of the panels during the investment forum. Rikka Torppa

7 Egypt Innovation seminar The EU-Egypt Innovation seminar series is an initiative that aims at sharing experiences in developing enhancing research and innovation ecosystems. This first of these seminars was co-organized by the Delegation of the European Union to Egypt and the German Science Center (DWZ) in Cairo. The seminar took place on the June 25 and brought together more that 180 researchers, industry experts, academics, entrepreneurs, policy makers, and financial institutions from Egypt and different MS to share knowledge and expertise and to build and deepen relationships. The seminar started with the opening remark of H.E. James Moran, EU Ambassador to Egypt and H.E. Michael Bock, German Ambassador to Egypt. Throughout the seminar, participants and speakers mainly addressed the different aspects of an ecosystem that is conducive to innovation. The seminar gave excellent insights into differently shaped ecosystems that support the competitive strategy of ecosystem players in different ways. It also acted as a platform for exchanging ideas between experts and stakeholders from Egypt and the EU. Heba Gaber

8 Agricultural development in Egypt EU and Ministry of Agriculture & Land Reclamation jointly hosted the launch of the implementation phase of the Support to Rural Development Programme (SRDP) on June 18. Ms Anna Lixi, Head of Social Affairs Section of the EU Delegation to Egypt spoke at the opening session of the launch. The Launching Event was then followed by a two-day Programme Cycle Management (PCM) Workshop. The event was attended by General Mohamad Hamoudy, Secretary General of Fayoum Governorate; Prof. Dr. Mona Mehrez,-representing H.E.Dr.Ahmed Algizawi, Minister of Agriculture & Land Reclamation; the Chairman of UPEHC, Prof. Dr. Nader El Banna; the Technical Assistance Team for the Programme and Senior members of the EU Delegation to Egypt. The 7 Beneficiary NGOs that were awarded Grant Contracts for the SRDP also attended the event. The Programme aims to contribute to the Ministry of Agriculture's commitment towards a comprehensive National Strategy for Rural Development. This includes a conditional incentive-based approach that is geared towards the needs of small farmers in deprived rural areas, while also making the best use of natural resources. It will take place in villages within the governorates of Fayoum and Menia and will span a period of 24 months. The overall budget for this SRDP pilot is EUR 10 million fully funded by the EU through the European Neighbourhood and Partnership Instrument (ENPI). Stephane David

9 Food Security in Egypt The EU Delegation participated to the Launch of the latest findings on food security, nutrition and vulnerability trends in Egypt based on analysis of the 2011 Household Income and Expenditure Survey (HIECS) conducted by CAPMAS. This event was jointly organised by the Central Agency for Public Mobilization and Statistics (CAPMAS), the United Nations World Food Programme (WFP) and the International Food Policy Research Institute (IFPRI) on May 21. They presented their policy note entitled Tackling Egypt s rising food insecurity in times of transition". Its purpose was to share with Government agencies, donors and practitioners the latest findings on the status of food security, nutrition and vulnerability in Egypt and their implications for policy makers and programming. The main conclusion of these studies is that the prevalence of food insecurity in Egypt has increased from 14% of the population in 2009 to 17.2% in Renewed efforts to address the needs of the 13.7 million Egyptian affected by food insecurity are needed. Stephane David

10 Field Visit to Kom Ombo Concentrated Solar Power Plant All donors involved in the financing of the Kom Ombo Concentrated Solar Power (CSP) Plant in the South of Egypt went on a field visit on June 17. The visit included the EU Delegation, the KfW, AFD, EIB, the World Bank and the African Development Bank. It is to be underlined that the decree establishing the PMU for Kom Ombo within the New and Renewable Energy Authority (NREA) was just signed. National budget FY 2013/14 already includes funds for Kom Ombo CSP. The donors requested NREA to indicate what is the amount of the approved budget, and whether this budget is allocated to Ministry of Electricity and Energy or directly allocated to NREA. It is to be noted that the estimated amount of NREA s equity contribution for Kom Ombo is approximately US$ million. Regarding the land permission are still needed from 4 ministries (Ministry of Agriculture, Supreme Council of Archaeology, Ministry of Environment, and Ministry of Petroleum). It was confirmed, however, during this mission that the transfer of the land to NREA can be finalized within the next two months A Solar measurement campaign for this project will start as soon as a 24 hour power supply and telecommunication infrastructure is installed. The Environment and Social Impact Assessment Study will be submitted to all donors by end of July Currently, all donors are in the process of providing comments on the feasibility of the project that is funded by the EU in the framework of NIF. The study and the findings were also discussed during the visit to Kom Ombo. Ahmed El Beltagui