Economy Middle East speaks to Dr. Hala Elsaid, minister of Planning and Economic Development of Egypt about the steps the country is taking towards sustainability on the sidelines of COP28. Dr. Elsaid delves into Egypt’s green and net zero transition initiatives. She sheds light on the importance of the Sovereign Fund of Egypt in supporting the economy and green projects. Finally, Dr. Elsaid, shares insights on Egypt’s economic outlook and expected growth for 2024.
Economy Middle East: Could you start by telling us more about your participation at COP 28? What are Egypt’s contributions and actions?
Dr. Hala Elsaid: Egypt is committed to the green transition and the net zero transition. We updated our NDCs a few months ago to reach 42 percent renewable energy by the year 2030 instead of the year 2035.
We’re also committed to the green transition. We have issued, for the first time, the environmental sustainability guidelines. All public institutions have to abide by embedding green components in all our investment projects. We have started with 20 percent of our green investments in 2021. This year, we reached 40 percent and we’re targeting 50 percent by the year 2024-25.
The second important thing that we are moving into is green renewable energy. We’re moving into the green transformation. Therefore, we have different projects that we need more financing for. Moreover, finance will not come only from the government. That’s why we’re mobilizing the private sector.
Within the state ownership policy, which the government announced a year ago, we aim to engage the private sector more. Now, private sector engagement in investment is at 30 percent and we need it to reach 60 percent in three years. So, investing in green projects is very important.
We not only need to engage the private sector but also international institutions. That is why we established the Sovereign Fund of Egypt. It is the investment arm of the government to include the private sector in different projects. We have projects in water desalination, green hydrogen, and wind farms and windmills. All these projects are based more on private sector contributions.
Moreover, we have one of the mega projects, which is our green public transportation, the National Egyptian Railway Investment Corporation. This project aims to incorporate electric trains and will be the biggest in Egypt. It will transform Egypt into a hub that exports this technology to the African continent.
Economy Middle East: In light of Egypt’s advancements in green hydrogen, are there any new agreements expected? What are your predictions for the future of green hydrogen in Egypt?
Dr. Hala Elsaid: We have signed about 14 agreements, nine of which were framework agreements. Currently, the companies are investigating the land and the wind pressure. Then, by the end of this year, they will come up with a finalized agreement to start using Egypt as a hub for green hydrogen projects.
This will not only be a source of fuel and renewable energy but also a complement to the localization of different industries that are related to green hydrogen projects. These include turbines and electrolyzers. However, all these projects are labor-intensive and technology-intensive.
So, we are transferring technology because we need to localize technology in our industries. This will be within the green hydrogen component is part of the agreement. Transfer of technology, localization of industry, and capacity building of skill sets are part of the agreement. We need to acquire the skill set for all the renewable projects that Egypt is embarking on.
Economy Middle East: Moving to Egypt’s privatization program, how is it progressing so far? What are the upcoming projects and estimated revenues for 2024?
Dr. Hala Elsaid: Since the privatization or monetization program started, we have achieved about $5.5 billion in proceeds from companies that have been privatized. Now, we are witnessing a lot of challenges worldwide, not only in Egypt. We are facing geopolitical challenges and tensions on the border. However, we’re still committed to continuing this program. Also, we have different programs that we are conducting with IFC, the government consultant. We are looking into different sectors, to see what sectors need restructuring. Moreover, we will start working on them and see what are the needed regulatory requirements.
We need to see what the needed restructuring measures for these sectors are, whether that is the telecom or aviation sector. Those are new sectors that we didn’t think could be monetized.
Through the Sovereign Fund of Egypt, we’re continuing our projects. We will be finalizing the hotel agreement by the end of this month, December.
Moreover, we will be finalizing the concession for the windmill by the first quarter of next year. We’re also looking into a turnaround of the insurance company through a strategic consultant. The consultant will look into how can turn it around in order to maximize the potential of this sector.
We also have Wataniya, which will be finalized within a month or two at most. Then, we will start preparing for a chill-out in privatization.
Read: ADFW 2023: Interview with Hasan Fardan Al Fardan, CEO of Al Fardan Exchange
Economy Middle East: What is the current status of discussions with the Arab sovereign funds? Will you have more pledges?
Dr. Hala Elsaid: We are open to all sovereign funds, Arab and international. We have partnerships with different sovereign funds. Arab sovereign funds are our partners and we’re working with them on different monetization programs and localization of industries. It’s a different full-fledged program and they are our partners, but we’re open to all international funds.
Economy Middle East: How do you see Egypt’s economic outlook for 2024?
Dr. Hala Elsaid: There are a lot of challenges including tensions on the borders which could impact the economy. However, we’re revisiting our economic growth every month. We project to have a growth of 3.5 percent. By the end of the year, we could have a little bit of a pause in investment. That is until we see what the outcomes of the tension on the border are. But, I think all sectors are moving, whether it’s the manufacturing, tourism, or construction sector. All of the sectors are moving as usual and as we hoped. However, to achieve sustainable economic growth, we need to achieve peace in the region and the whole world.
About Dr. Hala Elsaid
Minister of Planning and Economic Development since December 22, 2019, and a prominent Egyptian economist and academic figure. Dr. Hala Elsaid received her Ph.D. in Economics in 1989 from the Faculty of Economics and Political Science at Cairo University. In 2011, she became the first elected dean of the Faculty of Economics and Political Science and then assistant to the president of Cairo University for Scientific Research and Foreign Relations from September 2013 to 2016.
Dr. Hala Elsaid is a prominent female banking figure, as a member of the Central Bank’s Board of Directors and as an executive director of the Egyptian Banking Institute for eight consecutive years. She has also held several positions, including advisor to the Governor of the Central Bank of Egypt, a member of the Board of Trustees of the Central Bank’s Anti-Money Laundering Unit, and a member of the Board of Directors of the Arab African International Bank.
As a culmination of her prominent role in the area of public service, Dr. Hala Elsaid was appointed Minister of Planning, Monitoring, and Administrative Reform on February 16, 2017. She then took over the portfolio of the Ministry of Planning and Economic Development on December 22, 2019. She also continues taking over some of the files on the administrative and institutional reform process, as well as overseeing the drafting and implementation of Egypt Vision 2030 and its update. Dr. Hala Elsaid was also awarded the Best Arab Minister Award in the first round of the Arab Government Excellence Award in November 2020.
For more interviews, click here.
