This chapter discusses how Egypt can better align infrastructure planning and financing with its long-term sustainable development objectives and strengthen infrastructure resilience. Drawing on the G20 Principles for Quality Infrastructure Investment, the report evaluates Egypt’s policy frameworks, institutional arrangements, and implementation practices based on extensive consultations with Egyptian ministries and public agencies. While recent macroeconomic reforms have improved investor confidence, the chapter underscores the need for further reforms to unlock greater private sector participation. Key challenges include strengthening project planning, improving SOE governance and transparency, diversifying financing instruments beyond traditional PPPs, and enhancing institutional capacity across government. Addressing land governance, ESG reporting, and the adoption of internationally recognised standards will be critical to improving bankability, mobilising private capital, and ensuring that Egypt’s infrastructure investments are sustainable and resilient.
Mobilising Financing and Investment for Quality Infrastructure in Egypt
Abstract
This report assesses how Egypt can align infrastructure planning and financing with its long-term sustainable development objectives, enhance infrastructure resilience, and reinforce its position as a regional leader in renewable and green energy. Building on the OECD Compendium of Policy Good Practices for Quality Infrastructure Investment (2020[1]) and the G20 Principles for Quality Infrastructure Investment and drawing on extensive consultations with relevant Egyptian ministries and public agencies, the OECD evaluates Egypt’s policy frameworks, institutional arrangements, and implementation practices across selected infrastructure projects.
Egypt has developed an ambitious pipeline of infrastructure projects and attracted substantial financing from multilateral and bilateral development partners. The Green Investment Plan further outlines a pathway for the country’s green transition, including renewable energy expansion, green hydrogen production, improved water management, and decarbonisation of industry. Recent macroeconomic reforms under the IMF Extended Fund Facility have strengthened investor interest; however, additional measures are needed to structure projects and create an enabling environment conducive to increased private sector participation. While PPPs remain the primary mechanism for private financing, diversifying financing through private investment approaches, improving state‑owned enterprise (SOE) governance and transparency, and enhancing institutional capacity across ministries remain essential. Strengthening project appraisal, financial structuring, procurement, and infrastructure asset portfolio management – along with clearer approaches to land governance, ESG reporting, and the adoption of internationally recognised standards for emerging sectors such as green hydrogen – will be crucial for mobilising greater private capital and ensuring the sustainability, quality, and bankability of Egypt’s infrastructure investments.
With this in mind, below is an overview of the G20 Principles of Quality Infrastructure Investment (QII) and how Egypt’s reform efforts match each principle.
Principle 1: Maximising the positive impact of infrastructure to achieve sustainable growth and development. Infrastructure investment with job creation and technology transfer will promote a virtuous circle of economic activities through capacity building, productivity improvement and private investment facilitation. Connectivity should be enhanced by promoting sustainable development through infrastructure investment in accordance with such factors as SDGs, while being consistent with national and local development strategies.
Egypt’s Egypt Vision 2030 puts forward an ambitious national development strategy to modernise existing assets and develop a number of mega projects for poverty reduction and the empowerment of women, and support Egypt’s youth to strengthen the nation’s social fabric. The new Narrative for Comprehensive Development: Reforms for Jobs and Growth put forward a more detailed step to realise this, which includes “Well-Developed Infrastructure.”
This provides an important template to achieving Principle 1, so Egypt should remain proactive in accelerating macroeconomic and sectoral reform policies and transparency that would bring greater certainty and predictability of the economic outlook, and grow an enabling environment that contributes to greater financing opportunities for infrastructure projects by the private sector.
Quality infrastructure investment is essential for driving economic growth, enhancing productivity, and improving human well-being. Achieving these benefits requires governments and stakeholders to work together to establish robust policies and governance frameworks that ensure effective planning, financing, and oversight of projects. Developed under Japan’s 2019 G20 Presidency, the G20 Principles for Quality Infrastructure Investment offer a voluntary framework to guide countries in making infrastructure investments that maximise economic, social, environmental, and developmental benefits.
The six principles are as follows:
These principles emphasise the importance of sustainable and resilient infrastructure, economic efficiency, inclusive development, environmental sustainability, transparency and accountability, and innovation. Quality infrastructure is therefore a foundation for inter alia:
providing access to clean drinking water and sanitation which are fundamental for health and economic productivity
mitigating flood risks and improving access to water through improved storage for multiple water uses, such as irrigation, manufacturing and hydropower
improving access to clean and low-emission electricity
providing reliable and accessible low-emissions transport – a key contributor to improving livelihoods and economic productivity
expanding Internet access and telecommunication services that give rise to increasing connectivity and generate economic opportunities
delivering social services such as health, education and affordable housing, that are essential for human development and the reduction of inequalities
building sustainable, inclusive and livable cities
improving cross-border connectivity which is essential for supporting trade, integration into regional and global value chains, and inclusive growth
ensuring sustainable use of natural resources, and low-carbon and environmentally responsible societies
to achieve such positive outcomes, infrastructure investment should be guided by a sense of shared, long-term responsibility for the planet consistent with the 2030 Agenda for Sustainable
development, national and local development strategies, and relevant international commitments, and in the spirit of extensive consultation, joint efforts and shared benefits. Domestic resource mobilisation is critical to addressing the infrastructure financing gap. Assistance for capacity building, including for project preparation, should be provided to developing countries with the participation of international and regional organisations and development institutions and agencies.
Source: OECD (2020[1]), Compendium of Good Practices on Quality Infrastructure 2024: Building Resilience to Natural Disasters, https://doi.org/10.1787/54d26e88-en; OECD (2021[2]), OECD Implementation Handbook for Quality Infrastructure Investment, https://doi.org/10.1787/479131b2-en.
Principle 2: Raising Economic Efficiency in View of Life‑Cycle Cost. Quality infrastructure investment should attain value for money. It is important to take into account the total cost of construction of infrastructure, including its operation and maintenance (O&M). The risks of delays and cost over runs should be considered. Innovative technologies should be leveraged.
Egypt’s PPP Central Unit has been instrumental in providing an institutional framework to PPP development, including project preparation that would address efficiency and take a life‑cycle view on costs.
The centralisation of technical capacity at the MoF PPP unit has created the need for more capacity building on technical aspects of PPP projects at other ministries. Technical ministries would benefit from greater capacity building and awareness initiatives to fully understand the benefits of PPPs and channel as many infrastructure projects to the private investment and financing path as possible. Better understanding of the technical and financial assessment of PPP projects within the different ministries is key to fully engage the private sector and ensure timely and successful implementation of the projects for Principle 2 to be realised on a fuller basis.
Principle 3: Integrating Environmental Considerations in Infrastructure Investments. The impacts on factors such as ecosystems, biodiversity and climate should be considered. It is essential to improve disclosure of environment related information, thereby promoting the use of green finance instruments.
Egypt has developed environmental requirements to its infrastructure projects both through its PPP Central Unit, as well as procurement framework. Line ministries also have developed environmental requirements for their respective projects.
To ensure that environmental requirements across the ministries are aligned and address ecosystems, biodiversity and climate, Egypt should take stock of environmental requirements towards large infrastructure projects, to ensure that they are being applied in a consistent manner, at a standard that could be internationally recognised.
Principle 4: Building Resilience against Natural Disasters and Other Risks. Natural disaster risk management and human-risk management should be considered when designing infrastructure. Well-designed disaster risk insurance helps incentivise resilient infrastructure.
Egypt has increasingly recognised climate‑related threats and has developed and pursued a climate adaptation strategy through its National Adaptation Plan (NAP). Egypt should examine every potential financing avenue that could be made available for climate resilience, as well as pursuing measures that mainstream climate resilience of infrastructure, like reporting requirements and inclusion of climate risk in EIA. The reporting requirements should go beyond Class C projects, to ensure the mainstreaming of climate resilience.
Principle 5: Integrating Social Considerations in Infrastructure Investment. Infrastructure should be inclusive, enabling economic participation and social inclusion of all. Consideration should be given to open access, safety, gender and vulnerable groups.
Egypt has developed social requirements to its infrastructure projects both through its PPP Central Unit, as well as procurement framework. Line ministries have also developed environmental requirements for their respective projects. This includes assessing the potential effect, both positive and negative, on local communities and stakeholders. In addition, the Guideline for Gender-Responsive Planning was introduced, applying a methodology for measuring public spending directed toward women and children.
To ensure that social requirements across the ministries are aligned and address open access, safety, gender and vulnerable groups, Egypt should take stock of social requirements towards large infrastructure projects, to ensure that they are being applied in a consistent manner, at a standard that could be internationally recognised.
Principle 6: Strengthening Infrastructure Governance. Openness and transparency of procurement, anti-corruption efforts and access to information and data are important. In addition to financial sustainability for each project, macro-level debt sustainability needs to be considered.
Egypt Vision 2030 has placed an emphasis on promoting integrity, good governance, and transparency through institutional reforms and strengthening its anti-corruption framework, as well as governance and partnerships. In addition, Egypt has reformed a number of institutions and processes to improve the government of infrastructure.
Egypt should redouble its efforts in improving integrity of processes and institutions, by centralising and clarifying the applicable monitoring and enforcing body and process. The efforts by the Cabinet of Ministers to improve governance and transparency and reduce overlap between agencies should be vigorously pursued in this respect for Principle 6 to be more fully realised.
Based on desk research and discussions with government stakeholders, local and international investors, and international organisations, the following policy recommendations are being put forward to the Government of Egypt in the following areas:
I. Enabling environment and macroeconomy
a. Increase the focus on private investment in infrastructure and utilities in the next Egypt Vision strategy update and Egypt’s overall economic reform agenda together with the accelerated pace of investment reforms. This should encompass developing an enabling environment for foreign investors, which requires clear guidelines and regulations, as well as disclosure by the government to improve transparency.
b. Accelerate macroeconomic and sectoral reform policies and transparency that would bring greater certainty and predictability of the economic outlook and grow an enabling environment that contributes to greater financing opportunities for infrastructure projects by the private sector.
II. Foreign investment and market access
c. Continue to advance reforms to lift restrictions on foreign-controlled firms which could lead to greater entry of foreign private capital. Continue efforts to align with OECD and non-OECD benchmarks could further encourage foreign investment.
d. Continue to seek areas in which the enabling environment can be improved, with a focus on transparency of rules and regulations and disclosure of decisions and their rationale.
e. Demonstrate Egypt’s determination to reach international standards through expedited implementation of reforms to streamline business regulations and operations led by GAFI and the Ministry of Investment and Foreign Trade. Outline steps and timeline that will be taken to implement these, designate responsible ministries for each deliverable, and monitor the outcome in terms of practical steps and duration necessary for each procedure and ensure transparency of processes to facilitate foreign investment.
III. Access to Land
a. Addressing the requirements to access land by foreigners, especially through acquisition, could improve project implementation and hence financing of projects, given the difficulty of land acquisition, in particular large land parcels, for infrastructure projects to move forward.
b. Clarify and simplify the rules related to land investment regulations and streamline the processes necessary for access to land acquisition.
c. Clarify, beyond the specific land allocation schemes, where and how significant land parcels could be made available for infrastructure projects with the relevant regulatory, technical and environmental approvals, as part of the work to develop a national land registry as a long-term objective.
IV. Regulatory integrity and investor protections
a. Redouble efforts in improving integrity of processes and institutions, by centralising and clarifying the applicable monitoring and enforcing body and process. Vigorously pursue the efforts by the Cabinet of Ministers to improve governance and transparency and reduce overlap between agencies and extend an established unified digital system to streamline the information exchange between ministries.
V. State‑owned enterprises and corporate governance
a. Expedite operations of the SOE Unit to activate the State‑Ownership Policy (SOP) and implementation of steps to increase the role of the private sector in the infrastructure sector. Achieve divestment targets and expedite the corporate and financial restructuring of SOEs to increase investor confidence and help expand private investment in infrastructure assets.
b. Improve the financial structure and corporate governance of SOEs that own, operate and manage infrastructure assets, including disclosure through financial and non-financial reporting, and improving the accountability of SOEs, given the critical stage of SOE reform, regardless of the timeline of the State Ownership Policy and its implementation, as a prerequisite for increased private investment in infrastructure in Egypt.
c. Enforce a separation of duties, with ownership rights (such as board appointments and financial monitoring) for commercial SOEs being transferred from technical ministries to a centralised body to resolve the conflict of interest where line ministries act as both market regulators and asset owners.
d. Advance divestment in line with government priorities and better financial disclosure of SOEs which lead to better opportunities to financial and capital market participants and provide a gateway to investing in infrastructure assets as the market develops.
e. Ensure “Gatekeeper” provisions of Law No. 170 of 2025 are implemented, with the SOE Unit being able to prevent the creation of new SOEs without prior written authorisation.
f. Pursue asset recycling (through concession-like arrangements) of infrastructure assets, which would allow private sector access to profitable brownfield, mature assets to finance greenfield infrastructure assets, as well as leading to quicker and more impactful financial opportunities.
VI. Public-Private Partnerships
a. Engage more capacity building on technical aspects of PPP projects at other ministries and on the local governorate level to ensure wider understanding and adoption of engaging with the private sector.
b. Centralise the PPP process to ensure the development of bankable project models in different sectors and to increase private sector participation and a more centralised and co‑ordinated approach to allocating technically and environmentally viable land for projects. Centralisation of the PPP decision making process could be reviewed at the Cabinet level to have a scalable pipeline and fast track for project selection and approval.
c. Review all infrastructure investment projects potentially costing EGP100 million and above by the Joint Committee for PPP to increase the number of projects financed by private investment compared to financing from the state budget. The mandate of this committee could be formalised through a Prime Ministerial decree to help ensure a more consistent and objective approach to reviewing projects financed by the state budget.
d. Review smaller infrastructure projects costing below EGP100 million by a sub-committee affiliated with the Joint Committee, to expand on opportunities for SMEs to finance medium sized infrastructure projects especially in rural areas. The mandate of this committee could be formalised through a Prime Ministerial decree to help ensure a more consistent and objective approach to reviewing projects financed by the state budget.
e. Strengthen the understanding of the technical and financial assessment of PPP projects within the different ministries to fully engage the private sector and ensure timely and successful implementation of the projects. The fundamentals of the PPP Comparator concept should be elaborated within the technical ministries to clarify the merits of private investment financing versus state financing to reduce the pressure on the state budget and expand the role of private investment in infrastructure financing.
VII. Infrastructure planning and project pipeline development
a. Provide a pipeline of infrastructure projects in different sectors where the government is an off taker of the public service, improving the visibility of the pipeline of infrastructure projects, with plans for public investment and private participation as PPPs being clearly indicated, and with a mechanism of transparency of project preparation, development and other opportunities being made available through websites and international platforms. This should go beyond energy and water projects which currently dominate the pipeline of projects.
b. Expand the mandate of the inter-ministerial joint committee headed by the Deputy Minister of Finance on PPP to provide a clear roadmap for private investors and develop a national pipeline of projects in different sectors while addressing challenges facing private investors in infrastructure projects. The Joint Committee should promote more co‑ordination among the various ministries and help familiarise all parties with engaging the private sector through other financing venues like private infrastructure funds.
VIII. Private sector participation and financing approaches in infrastructure
a. Expedite the liberalisation of economic infrastructure sectors and other infrastructure sectors for private sector participation as a key step to attracting more private investors.
b. Adopt a sector-specific approach to financing by aligning private financing and investment strategies consistent with each sector’s characteristics and circumstances – accounting for potential revenue streams and private sector appetite. Long-term power purchase agreements (PPAs) in renewable energy could be extended to other projects that have a revenue stream, for example, and tolls for user fees in transport infrastructure can provide stable revenue streams, thereby incentivising private investments if the market is liberalised.
c. Consider the possibility of limiting government financing for renewable energy projects in some instances given the high interest and suitable geography of Egypt, which could be supplemented by long term private infrastructure investment funds instead.
d. Expand the involvement of the private sector in investment, operation and maintenance of projects and incentivise projects that manufacture spare parts so as to reduce reliance on commercial loans.
e. Encourage the Ministry of Transport to incorporate “Transit-Oriented Development” (TOD) in its transportation strategy, co‑ordinating with other modernisation and urbanisation projects, as it presents an approach to ensure sustainable development by strategically linking transit infrastructure with urban centres, thereby facilitating access to economic hubs. This could stimulate private investment, as increased land value brought about by these infrastructure projects can attract private capital inflows.
f. Support the development of financial instruments to expand private investors opportunities including through i) regulatory measures (including development levies, fees, and charges) to enable municipalities to capture a share of the value generated by private developments; ii) collaborative strategies (including strategic land management and the transfer of development rights) to create a conducive environment for private capital; iii) subsidises and tax incentives can direct private investment towards priority areas like green infrastructure; iv) partnership models between cities and private entities offer comprehensive frameworks for jointly planning, designing, and executing urban projects, enhancing service delivery and local economic development.
g. Consider the possibility of issuing an infrastructure‑specific bond to diversify the Ministry’s financing channels.
h. Consider the adoption of hybrid annuity models (HAM), a PPP model that combines aspects from engineering, procurement and construction (EPC) and build-operate‑transfer (BOT) models, for infrastructure networks which require large public investments otherwise, such as water, sanitation and electricity sectors, which require large capital investments in upgrading and extending the networks.
i. Develop the capital market and increase liquidity in the financial market through a strong regulatory framework and clear rules, accompanied by strong disclosure regime of financial instruments.
j. Mobilise domestic institutional investors to expand private financing opportunities towards infrastructure assets, including pension funds and banks that have the possibility of long-term investment which would allow better asset-liability matching. The regulatory requirements related to pension funds and insurance should be reviewed to examine whether asset allocation towards long-term investment can be increased. Incentivising domestic and foreign infrastructure investment funds is key to diversifying private financing to complement the use of the PPP model.
k. Consider the benefits of the potential establishment of an infrastructure‑mandated development bank or fund, which is well capitalised and is arm’s length from the government in its decision making with strong market expertise and technical knowledge, can better manage investments and support the private capital to take part in infrastructure development. Such a bank or fund can also contribute to the development of the capital market, through the issuance of debt and equity instruments which are part of a diversified portfolio towards infrastructure assets.
l. Enable international developers and investors to contemplate contracting with a more autonomous framing with special economic zones such as the Suez Canal Economic Zone. Such economic zones create strong investment incentives, bypassing certain regulatory burdens, and can be an attractive method to attract infrastructure investment into the country. Incentives including lower taxes or customs on parts for infrastructure projects could also boost private investment in such projects.
m. Encourage greater openness to private financing into economic infrastructure, including SOEs, depending on their financial performance and bankability. This could occur through the sale of equity (if divestment takes place) or debt issuance by SOEs. This will also contribute to the development of the capital market, as well as create a baseline of investment opportunities for both domestic and global investors.
n. Improve budgeting through better financial structuring of each asset in the ownership portfolio of an SOE to account for operational expenditure (OPEX) and capital expenditure (CAPEX). Explore operations and maintenance (O&M) agreements and asset management arrangements with the private sector (concessional agreements for example) to improve asset management of infrastructure assets and preserve and extend the asset lifetime.
IX. Risk mitigation and financial guarantees
a. Explore various types of guarantees and expanding the use of risk mitigation tools, as observed in other countries, to expand private financing opportunities and mitigate risks for both public and private parties.
b. Improve credit rating of projects through improved financial auditing to support the process of understanding the risk profile of a project or sector.
c. Provide risk mitigation tools such as guarantees from a national institution for projects that cannot be privately financed on its own, to improve risk management of projects and support local bank involvement in mega projects.
d. Give a stronger role to the export credit agency of Egypt in co‑ordinating and partnering with other export credit agencies, and providing a more diverse product line up to support the import of goods and services related to infrastructure development. Engaging more foreign commercial banks in this endeavour will be a critical step to improving the understanding of projects and enabling greater private capital mobilisation.
e. Improve risk management of infrastructure projects, by taking a more risk-based approach to its financing while expanding approaches to financing to pursue and manage the process of projects based on their priority.
f. Explore flexible payment options to pay part of the government payment in foreign currency which could increase private sector appetite for investment in infrastructure as the cost burden of FX conversion in the long term could be reduced.
X. Environmental and social impact assessments
a. Examine every potential financing avenue that could be made available, as well as pursuing measures that mainstream climate resilience of infrastructure, like reporting requirements and inclusion of climate risk in EIA, to strengthen climate resilience of infrastructure assets. Work on voluntary carbon market could contribute, and reporting requirements should go beyond Class C projects, to ensure the mainstreaming of climate resilience.
b. Take stock of the ESG requirements towards large infrastructure projects, to ensure that they are being applied in a consistent manner, at a standard that could be internationally recognised. In particular, given the export orientation that country is looking towards, the EU Taxonomy and Corporate Sustainability Due Diligence Directive (CSDDD) would be important rules to keep track of and bear in mind when developing ESG standards, especially for SOEs. This will also require developing experts who can carry out the external evaluation to certify their compliance with this as well.
XI. Green finance and sustainable investment instruments
a. Continue to consider ways to take advantage of how green and sustainability bonds could be further leveraged in Egypt with the support of credit enhancements.
b. Create diverse financing pathways for greenfield infrastructure projects including using blended finance tools to attract private capital, through assessment of approaches that could attract private capital and in particular working on improving the investment environment’s certainty and predictability, and assessing whether existing platforms are performing in the way they were intended to.
c. Expedite regulatory changes to allow the operation of ESG funds in the domestic market given that the market for sustainability-linked instruments is expected to grow, and it could provide new capital inflows into climate‑resilient infrastructure projects. Assessing the implementation of the framework, and adjusting as necessary, will be critical to have robust instruments which are externally recognised.
References
[2] OECD (2021), OECD Implementation Handbook for Quality Infrastructure Investment, OECD Publishing, Paris, https://doi.org/10.1787/479131b2-en.
[1] OECD (2020), OECD Compendium of Policy Good Practices for Quality Infrastructure Investment, OECD Publishing, Paris, https://doi.org/10.1787/54d26e88-en.