1. Philip ter Woort Director, Head of Office Egypt
EBRD in Egypt
Philip ter Woort
Director, Head of Office Egypt
EBRD Annual Meeting | Istanbul, 11 May 2013
© European Bank for Reconstruction and Development 2012 |

2. EBRD and Egypt - timelines
March 1991
Egypt co-signs AEB and becomes a founding father of EBRD
May 2011
G-8 expresses support of Arab spring countries (Deauville)
September 2011
EBRD Board approves geographical expansion into SEMED
October 2012
Egypt request to become a potential recipient country
November 2012
Egypt becomes a potential recipient country
December 2012
EBRD signs its first transaction in Egypt
May/June 2013
Article 1 & 18 ratified - Egypt eligible to become a CoO
September 2013
Opening of EBRD Resident Office in Cairo
May 2012
EBRD Governors approves €1 bn special fund for SEMED region
Host Country Agreement signed with Egyptian Government
Let me 1st add the context and share quickly some timelines
First – history EBRD and Egypt go back long time – 20 years – first of 25 founding fathers of EBRD
Two – non of us would be here if it was not for Arab Spring – Tunisia then to Egypt – January 2011 Mubarak resigned

3. Summary key transition challenges
Manufacturing & Services: Weak contract enforcement & limited competition & high firm disclosure costs
Energy: Unbundling & gradual price liberalization & regulator independence
Infrastructure: Underinvestment & tariff structures & little private sector involvement
Financial sector: State dominated banking sector & access to finance
Agribusiness: Low yields & limited logistics & resource inefficiency
Starting point EBRD – to understand the specific needs of Egypt – overall assessment
Transition gaps in all sectors:
Financial sector: Relatively well developed but state dominated
Agri: Resource inefficiencies – 50% production is wasted in the production chain
Cross sectorial:
Fuel subsidies distort system
Lack of regulatory independence
Large public sector poses challenges to private sector development
Challenge for economic inclusion: Youth, women, rural/urban divide
EBRD lessons learned:
Institutional reform critical
Sequencing difficult – big bang an illusion
Stuck in transit – EU or other anchor

4. EBRD Egypt Operational priorities
Finance and improve conditions for investments in the private sector, including mid-sized companies
Modernise the financial sector by strengthening its capacity and diversifying financial products and support of MSME’s
Enhance the agribusiness value chain to improve food security and strengthen the distribution chain
Increase the role of cleaner fuels and renewable energy and improve energy efficiency
Support reform and commercialisation of the transport, fuels and power sectors
Upgrade and expand municipal infrastructure
EBRD currently operating under a Needs Assessment of October to be followed by (first) Country Strategy
You will hear a lot – private sector – main focus and raison d’etre our focus on private sector.
Private sector driven:
Dedicated team focused on smaller transactions
But also direct lending to larger companies and property projects
Strong capacity building element: SBS – improve competitiveness and productivity
Financial sector:
Particular focus SMEs: 75% GDP, 80% employment, 5% of credit
Cornerstone engagement: Medium term finance to local banks to on-lend to local MSMEs
Possibly targeted: Focus on energy efficiency projects, regional
TFP – Successful – transaction – credit enhancement - support trade flows – particularly important for Egypt (export
Look at alternative forms of finance, leasing and mortgage finance.
Agri:
Investing in entities/projects along the food chain (storage, logistics, processing and retail)
Agricultural infra projects (warehousing, (cold) storage facilities)
EE & renewable energy:
Support energy efficient investments in manufacturing & agribusiness
Investment to reduce energy & water consumption
Renewables – wind and solar (wish list of each IFI)
Transport , fuels, power:
Private sector participation in infra development (ports) but also projects with ENR, water and waste water)
Supporting critical investments that promote a high quality and a stable secure supply of fuel and energy
Power: Possible PPP solutions, focus on increase of efficiencies and cost covering – also smart metering
Municipal: Promote financially viable public sector entities, possible PPP basis
Early days – still learning !

5. EBRD strengths & added value
Strong international recognised financial partner with long term perspective and deep private sector focus and experience
Triple A rated as recently confirmed by all three major rating agencies
Close working relationship with governments and shareholders
International Financial Institution with a preferred credit status
Wide tool kit, including technical assistance (energy efficiency)
Stamp of approval on corporate governance & environmental standards
Strong Int. Partner: Triple A status recently confirmed.
Political leverage due to EBRD’s mandate and shareholder structure

6. EBRD Finance Tool Kit Loans Equity Senior, subordinated, convertible
Long term (up to 10yrs or more) or short term revolving
Floating/ Fixed rates
Choice of currencies (EUR, USD, RUB etc.)
Mobilize external finance
Common stock or preferred
Minority position only (up to 35%)
Mezzanine debt
Particular focus private sector
Within private sector - SME sector – direct lending – LEF: dedicated team on the ground
EBRD value chain: BAS – EGP – become EBRD finance prospects
ALWAYS: Additionality

7. EBRD Egypt – Activities to date
Hired a team of 10 Egyptian professionals
Small Business Support: > 50 technical assistance projects
General PD TA programs (including obtaining funding for MSME/WIB programme with the Social Fund for Development)
Already signed 2 transactions for aggregate amount of Euro 29 mm:
Euro 19 mm – White good manufacturing company
Euro 10 mm – Waste water treatment plant
In process to building a diversified pipeline of new projects
Over 200 visits to Egypt
All without an operating RO
Deals in pipeline: Very diversified: MSME credit lines with local banks; leasing; regional waste water plant & wind park, a gas flaring project

8. EBRD in Egypt – Open for business!
Can forget anything from presentation – but remember ‘open for business’
Egypt has many challenges indeed – but the private sector I have met so far is impressive, forward thinking – can become a tugboat for economic progress and be a positive contributor to Egypt in transition
My privilege to be able to represent EBRD in Egypt in these challenging times – I hope EBRD can play a positive role and contribute in overcoming some of these challenges
Contact: Philip ter Woort,