Negotiations to import Russian gas via state-owned Russian company Gazprom will resume early next year, according to Arkady Dvorkovich, Russia’s Deputy Prime Minister.
The Deputy Prime Minister added that he expects positive results from the negotiations.
Dvorkovich, who met with President Abdel Fattah Al-Sisi on Tuesday, added during a press conference held Tuesday evening: “Egypt has exited the stage of its economic downturn and has begun to recover. Russian capital will soon begin to flow into several sectors, the most important of which are agriculture, industrial facility rehabilitation, petrochemicals, and telecommunications.”
He said that the number of Russian tourists to Egypt will jump to 3 million by the end of 2014, representing 35% growth over last year. The possibility of lifting travel warnings to various tourism areas in Egypt is under consideration.
He went on to speak about cooperation on the Dabaa nuclear power plant, saying that Russia was waiting for an invitation from Egypt to begin.
Investment Minister Ashraf Salman, who was also present at the Tuesday evening press conference, said an agreement was made with Russia to begin considering development for the governmental iron and steel plant. This comes especially as there are two ovens for Russian manufacturing in the factory, in addition to cooperation with them to develop the automotive industry. The agreement will also identify whether it is preferable to grant licences to the El-Nasr Automotive Manufacturing Company or construct a new factory in Egypt.
Salman said that the talks also revealed Russian interest in the petrochemicals sector, as it is very attractive for investment at present.
Salman said that the Dabaa nuclear plant project is at the forefront of government priorities and is being studied from technical and financial perspectives. He stressed that studies will take more time, but that Russia will be the main partner when procedures do begin.
Salman continued, saying that Egypt’s compounded returns rate on investments has increased to 27.5%, bringing the country to second place in the world for this indicator, following only Brazil. This reflects the extent to which the Egyptian market is attractive for investment despite the current difficulties.
Salman said that the fact that two international companies, Kellogg’s and The Abraj Group, are competing to acquire BiscoMisr is an indicator of good investor confidence in Egyptian markets. He added that the near future will witness acquisition offers greater than those present now, as one large investment bank will invest nearly $1bn in Egypt in the upcoming period. Salman, however, declined to reveal the name of the bank.
Salman said that technical and technological preparations will begin with the World Bank in the coming days. The preparations are important since the amendments to the investment law and the ‘one-stop shop’ investment window system will return to the Justice Ministry next week for four days of discussion. Following this, the amendments will be sent to the cabinet, the legislative reform committee, and then the President, to be eventually approved before March.
According to Hassan Fahmy, Chairman of the General Authority for Investments and Free Zones (GAFI), Russian investments in Egypt are currently very weak. Only 399 companies, most of which operate in the field of tourism, with capital amounting to $68m.