SHARM EL-SHEIKH, Egypt (AP) — Corporate leaders offered upbeat assessments Saturday of Egypt’s economic prospects and confidence in the government’s ongoing efforts to streamline the country for business after four years of unrest, as companies signed billion dollar deals at a conference aimed at spurring investment.
The meeting, a cornerstone of the government’s plan to woo desperately needed investors, began a day earlier at the spruced-up Red Sea resort of Sharm el-Sheikh with massive commitments from key Gulf allies United Arab Emirates, Saudi Arabia and Kuwait.
Saturday’s focus shifted to the private sector, with several companies announcing agreements, including some from Germany’s Siemens AG that were the largest single package signed at the three-day conference.
The industrial giant agreed to invest $10.5 billion ($10 billion euros) with projects to build power plants that will boost the country’s electricity generation capacity by up to a third. CEO Joe Kaeser told The Associated Press that the deals were signed Saturday after negotiations with President Abdel-Fattah el-Sissi, “who drove a hard bargain.”
“It will create 1,000 jobs and we’re ready to start as soon as possible,” he said. “We’ve been doing business here for over 110 years so we’ve seen crisis come and go. … It’s not about (us) coming and going.”
He said the package included binding agreements worth about $4.6 billion ($4.4 billion euros). They include a new 4.4-gigawatt power plant in southern Egypt, a project to generate 2 gigawatts of wind power and a new wind rotor blade factory. The other agreements were memoranda of understanding to build other plants and substations over the coming five years.
Italian petroleum company Eni also was among several entities who signed preliminary agreements Saturday. Egypt’s Oil Ministry said in a statement that the Eni deal was worth an estimated $5 billion ($4.8 billion euros) and would develop oil and gas resources.
Egypt, the Arab world’s most populous country, faces a power shortage causing rolling blackouts that affect tens of millions of people, one of several woes the government is addressing.
More importantly, authorities are fighting an insurgency against Islamic militants in a restive corner of the Sinai Peninsula, several hundred kilometers north of the conference.
The gathering of royals, heads of state, top international officials and businessmen has emerged as an opportunity for el-Sissi, Egypt’s former army chief, to put behind him criticism over the military’s 2013 ouster of an elected president, the Islamist Mohammed Morsi.
Since the ouster led by el-Sissi, the government has cracked down hard on Morsi’s Muslim Brotherhood and other Islamists, with hundreds killed and thousands imprisoned. It also has targeted secular and liberal activists.
In recent weeks, militants have shifted their focus to a campaign of small bombings aimed at local and foreign business interests in Cairo and other cities, including an American fast food chain, a branch of an Emirati bank, French supermarket chain Carrefour and foreign mobile phone service companies.
Jeff Immelt, CEO of General Electric Co., said that despite the risks, Egypt is a key piece of its global strategy, which considers opportunities over the long term.
“We don’t expect things to be perfect but we think over the longer term our investments will pay off,” he said in a panel discussion at the event, adding that GE had committed a day earlier to invest $200 million in the country.
Mohamed El-Erian, chief investment adviser for multinational financial services company Allianz, said the difference between now and before the 2011 uprising that toppled longtime autocrat Hosni Mubarak was that the current leadership is serious about bringing prosperity to the people.
“Most of us agree that there’s a fundamental change in the design of the economic policy framework,” he said. “There’s a clear emphasis on inclusive growth.”
However, there was some skepticism at the event. Arif Naqvi, chief executive of UAE’s private equity Abraaj Group, said that Egypt needs a lot of capital very fast, and that requires more than just government cheering.
“What it needs is for the private sector to stand up and say, ‘Yes, this is the time for investment,’” he said. “Because until the private sector does invest, all of the good actions of government, all of these reform processes that are being put in place, will actually not go anywhere.”
Copyright 2015 The Associated Press