Gulf States Eye Egypt Power Plant, Fuel Firm in Investment Surge

(Bloomberg) -- Gulf Arab nations are interested in buying stakes in a fuel-distribution company owned by Egypt's army and a power plant co-built by Siemens AG among their multi-billion-dollar investment pledges, according to the CEO of the North African country's sovereign wealth fund.

“Several international investors, including Gulf sovereign wealth funds, have showed interest in Wataniya and the Siemens-built power plant,” Chief Executive Officer Ayman Soliman said in an interview Tuesday. The sales are planned for this year through either an initial public offering, a partnership with a strategic investor or a combination of the two, he said.

“I see that we should secure a strategic investor ahead of the IPO,” Soliman said. “The IPO could be achieved through a private placement to sovereign wealth funds.”

Oil-rich Gulf countries are looking to bolster Egypt's economy as it comes under increasing strain from soaring commodity prices due to the war in Ukraine and seeks International Monetary Fund assistance. Some of the help also reflects a political focus. Saudi Arabia and the United Arab Emirates pumped billions of dollars into Egypt after the 2013 ouster of a president who hailed from an Islamist political organization many Gulf states see as a threat.

Saudi Arabia's Public Investment Fund is exploring potential investments in Egypt worth $10 billion, Qatar is putting up $5 billion for deals in the most Arab populous nation, while Abu Dhabi wealth fund ADQ made a roughly $2 billion deal to buy Egyptian state-owned stakes in publicly-listed companies.

Egypt Hikes Interest Rates and Lets Pound Fall to Absorb Shocks

Egypt first announced plans to sell one of three power plants co-built by Siemens AG around three years ago, and multiple international investors expressed interest in the assets.

In 2020, it targeted selling a stake in Wataniya Petroleum as the first salvo in plans to offer as much as full ownership in up to 10 companies held by Egypt's National Service Products Organization, which is affiliated with the Defense Ministry.

Egypt's Economic Pivot Takes Shape as Army Firms Up for Sale 

A major food importer, Egypt has been hit hard by record grain prices fueled by Russia's invasion of Ukraine. One of the Middle East's most indebted nations, it buys most of its wheat from the two countries currently at war, while Russian visitors previously made up a significant portion of its tourism market.

Ministers are due this week to discuss which state-owned companies will be offered on the Egyptian stock market in 2022, Planning Minister Hala Elsaid said March 31.

The PIF, Qatar Investment Authority and ADQ have all “expressed interest in supporting and accelerating Egypt's IPO program,” Soliman said.

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