The EEDC one year later: Some progress, but most promises unmet

A year ago today, President Abdel Fattah al-Sisi launched the Egypt Economic Development Conference (EEDC) in Sharm el-Sheikh. The conference was a public relations coup for Egypt’s government, attracting thousands of high-level investors and government delegations, and yielding agreements worth US$38.2 billion and another $92 billion in potential deals.

A year later, the results look somewhat less dramatic. Central Bank figures show that from January to March 2015 — the quarter in which the EEDC took place — net foreign direct investment ramped up to over US$2.9 billion compared to an average of around US$1.1 billion in the previous four quarters. However, that figure dropped down to US$690 million the following quarter, which began just two weeks after the conference. In July-September, the most recent quarter for which data is available, foreign investment recovered somewhat to US$1.39 billion. In other words, net FDI amounted to just over US$2 billion in the half-year following the EEDC, and no more than US$5 billion if we include the quarter that ended with the conference.

So what happened? Plans went awry for some of the highest-value projects, such as the US$45 billion New Capital Cairo project. Other projects, such as a proposed “$8 to $10 billion transport project” from Chinese Port Engineering seem to have been quietly shelved. Others are progressing, but slowly—such as real estate deals that have only recently reached the contract stage but are nowhere near breaking ground. On the bright side, despite a downturn in the global oil market, the sector remains relatively strong for Egypt, particularly with Eni’s discovery of a massive offshore gas field.

Egypt’s government does not maintain a public database tracking EEDC commitments, and requests for information sent to the companies involved in some of the more mysterious projects went unanswered. Here is everything we currently know about the projects announced during the conference.

The New Capital Project

By far the largest and most ambitious project announced at the summit, the New Capital Cairo project deserves its own category. It was presented as a US$45 billion scheme to build, from scratch, a 700-square km city in the desert. Emirati firm Capital City Partners signed an MoU to construct the project, but that plan went off the rails in June 2015 when talks with the Emirate developer reportedly broke down. The government is determined to keep the project alive, but there also seems to be confusion. In September, Egypt signed an MoU with Chinese mega-firm China Stata Construction Engineering Corporation (CSCEC) to build a 25-feddan section of the project. In October 2015, Sisi declared that the first phase of the project, which includes 10,500 feddans, would begin in January 2016, and be completed within two years. So far, no ground has been broken on the project, although last week Egypt said CSCES had completed designs for 12 ministries to be built in the first phase. The most recent deadline for getting the project started is now April 1.


Chinese companies have signed on for the new capital project, but backed out of other infrastructure agreements. A US$700 million agreement for China’s railway authority to build an electric train was scrapped during contract negotiations. This month, the transport ministry also said port projects in Alexandria and Damieetta were on hold for legal reasons. This adds to question marks about the status of a US$8-10 billion transport project Chinese Port Engineering, a US$4 billion project from Dubai Ports International.

Nor is there news on US$6 billion in investment pledged by the UAE’s Al Swaidan Trading Co. for the Damieetta Grain hub project, although Egypt announced last month that the project will be launched by the end of 2016.

Real estate projects

Media reports at the time of the EEDC listed eight real estate deals worth a combined total of more than US$33 billion dollars. As of this month, Mada Masr was only able to confirm that four of these deals have gone as far as a contract being signed, with a combined value of LE100 billion — impressive, but half of the US$33 billion estimate, even at the official dollar exchange rate.

According to local media, the Ministry of Housing has reached agreements with a consortium of Egypt’s Mountain View and Saudi Arabia’s Sisaban for projects in 6th of October City and New Cairo; with Arabia Group for its “City of the Sun” project in 6th of October City, and with Palm Hills Development for a project in New Cairo. Another deal, ARCO’s South Marina project, made it into contract negotiations at the beginning of the year, but the two parties failed to agree on terms.

Energy generation

The energy sector saw some of the biggest deals announced at the conference, and most of them do appear to be showing some movement. During the conference, Germany’s Seimens announced it had reached firm agreements today to build a 4.4 GW combined-cycle power plant and install wind power capacity of 2 GW. The company also agreed to develop concepts an additional 6.6 gigawatts of combined cycle power plants, as well as 10 electricity substations. This deal was expanded to an 8 billion euro megaproject in June 2015. Last month, the first two turbines were shipped from Germany to Egypt, and they are expected to arrive in Beni Suef in May. Egypt is also reportedly in the process of securing loans for the wind plant.

A pre-existing US$1.9 billion gas turbine deal with US-based GE also appears to be moving along. However, a timeline for a US$200 million “multimodal manufacturing, engineering, services and training center” has not yet been announced.

During Sisi’s recent visit to China, a US$1.8 billion MoU to develop the Egypt’s energy grid progressed to the signing of a contract.

On the renewables side, Orascom was reportedly granted a license for a US$100 million solar plant in Aswan.

Negotiations with Saudi Arabia’s ACWA — which was reportedly signed up for more around US$11.5 billion in energy generations projects — don’t appear to be progressing as well. The  projects, including a coal plant and combined-cycle gas plant are still in negotioations, with at least one deal running into trouble over pricing disputes.

Other announcements made at the EEDC remain complete mysteries, despite attempts to contact the companies involved. Among these are announced agreements with the A.A. Turki Group (known as ATCO) to invest US$3 billion in Egypt’s solar energy sector, a US$2 billion Waste Management & Renewable Energy from KBBO, and an MoU with Tharwa investments, parent company of Four Winds Investments, to build an US$11 billion, 6,000 megawatt power coal-fired power plant, remain mysteries.


Pepsi announced plans to invest US$500 million in Egypt, including a juice plant to be built with Saudi Arabia’s Almarai under the name Beyti. This wasn’t an entirely new plan — the juice factory plans date back to 2014, but represented an uptick in investment commitments. The company broke ground for that factory on Saturday. On the downside, Pepsi has complained about Egypt’s currency shortage, although it says production has not been affected.

Plans announced by Orascom to increase production capacity at Nile Sugar do not appear to have progressed. Nor is there news about a US$4 billion beverage project by the International Company for Food Industries.

Oil and gas

The gas deals announced at the EEDC included previously negotiated deals, such as  a US$12 billion deal with BP announced in 2014 and finalized before the conference.

Among the deals signed at the conference itself was a framework agreement with Italy’s Eni envisioning US$5 billion in investments over four years. Eni’s subsequent discovery of a giant gas deposit in the offshore Shorouk concession can’t really be credited to this deal: Eni was awarded the concession in 2013. However, it seems likely the investment plans laid out by Eni at the EEDC will be met or exceeded.

The future of a US$4 billion investment commitment from BG is less certain after that companies buyout by Shell, but local experts are optimistic. Dana Gas, which pledged $350 million in investments, is still struggling thanks in part to Egypt’s unpaid gas bills, but is still drilling new wells in Egypt.

Isabel Esterman 

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