The Sovereign Fund of Egypt (SFE) is in talks with unidentified investors from Senegal and Uganda with an appetite for fintech services, fund CEO Ayman Soliman said at a June 8 virtual press conference.
The fund is finding renewed interest in sectors that would enhance financial inclusion in Egypt. “Investments in financial technology (fintech) are no longer a luxury,” said Soliman, adding the fund has adjusted its investment priorities to include food, pharmaceuticals, healthcare, and financial inclusion services. Healthcare, in particular, will require “significant investment” going forward, he said.
The SFE, established in 2018, will create four subfunds covering the prioritized sectors and three additional funds later. It aims to add EGP 60 billion ($3.7 billion) in assets to its portfolio.
Discussing the suffering tourism sector, Soliman reported talks have slowed on the renovation of the Bab El Azab district in Old Cairo. The project involves building a museum with interactive technology, craft schools, theaters, and other facilities. In May, local media identified billionaire businessman Samih Sawiris as a potential investor. “Investor appetite is still there, yet tourist site renovation is currently not among the priorities,” said Soliman.
The SFE also has received bids from investors involving the country’s military-owned firms, said Soliman, without revealing details. In February, the fund reached a deal with the Defense Ministry’s National Service Products Organization (NSPO) for the restructuring and development of several affiliated companies to attract investments. The NSPO portfolio includes companies in the food, agriculture, industrial, engineering, services, and mining sectors.
Soliman said that Parliament’s amendments to the SFE law “will give more flexibility in procedures,” stressing that transparency will be maintained. The changes would exempt the fund and its entities and sub-funds from taxes and fees and restrict legal actions against it.
Soliman added that they delayed the SPE’s first general assembly meeting to approve the appointment of an auditor. Still, he remains committed to publishing financial statements for FY 2019/2020 and regularly reporting earnings.
Last month, the SFE signed a memorandum of understanding (MoU) with Concord International Investments Group to establish a joint company to moderate a fund specialized in healthcare in the Middle East and North Africa. The fund would primarily target the support and expansion of both public and private healthcare infrastructure projects. It will also have the mandate to set up export-driven healthcare ventures and “identify co-investment opportunities in significantly large projects.”
The specialized fund’s first phase, worth $300 million, targets long-term foreign direct investment opportunities and creating joint investment opportunities in other mega projects, Soliman explained. “The SFE will not hold a majority stake in the fund,” he said.
Since 2018, the fund has been active in the energy sector — offering as much as a 70 percent stake in the first of three Siemens-built 14.4-gigawatt combined cycle power plants. It has also entered into a $20 billion partnership with Abu Dhabi Holding Co. and signed an agreement with Hassan Allam Holding to invest in electricity, water, infrastructure, and renewable energy projects.