This report focuses on good practices for quality infrastructure investment while addressing considerations for mobilising finance for infrastructure to meet Egypt’s long-term development goals. These approaches are designed to align with Egypt’s sustainable development ambitions and enhance the resilience of its infrastructure, positioning Egypt as a regional leader in the production and exportation of renewable and green energy.
Mobilising Financing and Investment for Quality Infrastructure in Egypt
Abstract
Executive summary
This report presents good practices for quality infrastructure investment and highlights how Egypt can attract more private finance to meet its long-term development goals. The approaches discussed aim to support Egypt’s sustainable development ambitions, strengthen the resilience and performance of infrastructure systems, and position the country as a regional leader in renewable and green energy production and export.
G20 governments recognise quality infrastructure investment as central to developing infrastructure as an asset class and mobilising private and institutional investment. Building on the OECD Compendium of Policy Good Practices for Quality Infrastructure Investment and the G20 Principles, and extensive consultations with Egypt’s ministries, public agencies and private stakeholders, the OECD assessed Egypt’s infrastructure frameworks, practices and project pipeline.
Egypt has secured significant financing from multilateral and bilateral partners and developed an ambitious pipeline of infrastructure projects. Its Green Investment Plan outlines a roadmap that prioritises renewable energy – particularly green hydrogen – alongside water management, energy efficiency, electricity generation, and industrial decarbonisation.
International investors’ interest and confidence has grown, supported by reforms under the IMF Extended Fund Facility, including the liberalisation of the Egyptian pound. Although the investment climate has improved and the public-private partnership (PPP) framework has expanded, Egypt would benefit from a more holistic approach to project structuring and private capital mobilisation. Large‑scale projects exist, and building conducive conditions for private sector entry will lead to a more diverse pipeline of scalable projects for private investment.
Egypt Vision 2030 and the Integrated National Financing Strategy (INFS), complemented by the New Narrative for Comprehensive Development, provide national roadmaps for mobilising domestic and international public and private finance. Initiatives such as the Suez Canal Economic Zone demonstrate progress, and further expansion of such initiatives could help create a more comprehensive framework for project development across sectors.
Infrastructure projects involving private participation are primarily structured through PPPs, managed centrally by the Ministry of Finance. The establishment of PPP units within sectoral ministries has improved efficiency. Each PPP is tailored to the project’s risk profile and sector needs. Egypt would benefit from diversifying financing approaches based on project scale, market appetite, and revenue potential.
Value‑for-Money (VfM) and Public Sector Comparator (PSC) assessments help determine optimal procurement models and could guide certain projects away from non-PPP models such as Engineering Procurement Construction (EPC) or EPC+Finance arrangements. When possible, establishing a special purpose vehicle (SPV) can facilitate access to capital markets, including bond issuances. Additional tools such as land value capture, asset recycling or securitisation could help unlock financing for brownfield assets.
Sovereign guarantees are provided only when the government is the off-taker (government pay PPPs). For user-pay projects, the private operator collects fees directly without sovereign guarantees. The government currently assumes foreign-currency risks for the foreign-financed capex portion, expanding the pool of PPP-eligible projects, enhancing competition while mitigating fiscal pressures.
Sectoral differences matter: projects with strong revenue potential, such as ports and renewable energy, can attract equity and debt investments through SPVs or private infrastructure funds. For other sectors, public investment should be prioritised. A mandatory review of all public infrastructure projects valued above EGP100 million by the interministerial committee could enhance private investment and reduce e budgetary pressures. Blended finance mechanisms could further support PPP development.
State‑owned enterprises (SOEs) play a critical role in infrastructure as owners and operators of infrastructure assets. Investors value SOE governance, transparency, and alignment with national policies that improve predictability. Improved disclosure regarding SOE restructuring and potential divestment plans can enhance investor engagement. Ongoing updates to the State Ownership Policy (SOP), along with strengthened governance, restructuring of economic authorities, and improvements in financial and climate‑related disclosures – will support the much-needed SOE reform.
Many technical ministries combine the role of SOE regulator and owner, raising potential conflicts of interest. Reforms underway – particularly in the transport, housing, and electricity ministries – seek to mitigate these issues.
Egypt is committed to gradually divesting ownership of some SOEs to raise capital and deepen the capital market. Partial stock exchange listings, together with stronger governance and arm’s length management could make SOEs more attractive for both equity and project-level investment. Additionally, concessional ownership and operation rights for infrastructure and greenfield assets could encourage long-term private investment while maintaining strategic state oversight.
Complementary strategies to explore include creating an infrastructure‑mandated development bank to provide equity and debt financing, and enabling independent private infrastructure funds to operate domestically. Such initiatives could diversify financing channels and leverage specialised financial and technical expertise.
Institutional capacity remains a challenge given the scale of Egypt’s infrastructure pipeline. Strengthening ministries’ technical, financial, and governance capabilities in project planning, structuring, and contract management is essential. Implementing the IMF’s 2023 Public Investment Management Assessment (PIMA) recommendations – including better project selection, further market liberalisation, operationalising public finance management reforms, and improving asset management and maintenance would significantly enhance co‑ordination and accelerate private sector engagement.
Regulations governing access to land for investment projects could benefit from more simplification. Building on the golden license system established under the 2017 Investment Law aims to streamline approvals, Egypt could simplify approvals for select projects. Enhanced due diligence and automated mechanisms for flexibility can safeguard national security.
ESG reporting requirements currently apply to listed firms regulated by the Financial Regulatory Authority, while the Central Bank of Egypt has issued guiding principles embedding ESG considerations into bank credit decisions. Extending ESG reporting to SOEs would improve transparency and investor appeal. As Egypt expands green energy exports and aligns with the EU Carbon Border Adjustment Mechanism (CBAM) requirements, adherence to internationally recognised environmental standards will be crucial, with improved financial and non-financial reporting.
