meed-logo

line1 line2 line3
SIGN IN / REGISTER

Egypt currency crisis stokes project delay fears

17 January 2023

 

Concerns about widespread infrastructure project delays are worsening in Egypt as the country’s currency crisis escalates.

The North African country has $368bn of active infrastructure projects, all of which could potentially be impacted by the turmoil to varying degrees.

This includes $90bn in chemical projects, $123bn in construction projects, $24bn in industrial projects, and $18bn in oil and gas projects.

A total of $119bn of these projects are under execution, while $249bn are in pre-execution phases.

Egypt pound hits record low

The Egyptian pound plunged to 31.95 to the dollar in state banks on 11 January, hitting a record low, before settling at 29.7 in the afternoon, according to the country’s central bank.

On the same day, it was reported that the Egyptian pound was trading at around 35 to the dollar on the black market.

The decline in the value of the Egyptian pound came after the IMF released a report relating to its $3bn financial support package to Egypt.

The report, issued on 10 January, stated that the country had agreed to a “flexible exchange rate regime” for the pound in order to receive the assistance.

Egyptian authorities also told the IMF that they would only intervene in foreign currency markets in cases of “excessive volatility”.

Economic hardships

The Egyptian pound has lost half of its value since March, causing the price of basic foods to triple and prompting a wide range of severe economic challenges.

Inflation continues to rise, with Egypt’s annual headline inflation hitting 21.9 per cent in December, and billions of dollars in goods are backlogged in Egyptian ports.

Many people are struggling to feed their families and this is stoking resentment against the government

Source in Egypt

Financing and procurement problems mean that many infrastructure projects that have been announced and are either in a pre-execution or execution phase are already experiencing or preparing to face delays.

Optimism about the prospect of new projects being announced has also declined as the government has pushed to reduce public spending.

Earlier this month, Egypt’s government instructed ministries to cut non-essential spending until the end of the fiscal year in June as it tries to cope with continuing pressure on its currency and rising inflation.

The 4 January decision includes postponing any new national project reliant on foreign currency.

It also requires ministries to seek Finance Ministry approval on foreign currency expenditure.

The health, interior, foreign and defence ministries are exempted, as well as agencies tasked with expenditure on subsidised food products and energy.

According to the decision, which was announced in Egypt’s official gazette, activities listed as non-essential spending include travel, marketing and conferences, as well as grants and training for employees.

Ports backlog

As the Egyptian pound came under pressure in February 2022, the central bank implemented changes to the rules around import financing that led to a huge backlog of goods at ports.

The worsening currency crisis has compounded the problems relating to the changes to the rules around import financing. However, over recent weeks Egypt has taken several measures to try to release these goods.

The efforts to restore order at the ports have included reversing the letter of credit (LC) system introduced in February last year and restoring the previous documentary collections system.

The decision to enforce the LCs system, effective since March, required Egyptian banks to accept only LCs for imports to curb dollar outflows from the country.

On 11 January, Egypt’s cabinet issued a statement saying that goods worth $1.5bn had been released from Egyptian ports over the first 10 days of the year.

This makes the total value of released goods since the start of December $8.5bn.

The goods that have been released include items required for industrial purposes as well as spare parts, medicine and food.

“The government has prioritised restoring order at the ports,” said one industry source. “There has definitely been progress, but the economic impact is still likely to be felt for years to come.

“It isn’t easy to untangle the backlog of containers as many perishable goods are now worthless and, in some cases, companies that were meant to collect items have gone bankrupt.”

Political instability fears

Stakeholders watching Egypt are also concerned about the possibility of political instability related to the economic problems.

One source said: “Across the board, citizens that are earning money in Egyptian pounds are seeing their purchasing power decimated.

“Many people are struggling to feed their families and this is stoking resentment against the government.

“Egyptian police forces have a reputation for dealing with protests with a heavy hand – and this means that many people are likely to be reluctant to go to the streets to demonstrate because of this.

“However, as the situation continues to worsen, some people may start to feel like they are desperate for change and have no other options left open to them.”

Some projects are likely to get through these issues with minimal disruption while others could potentially experience delays that last for years or even cancellations

Source in Egypt

On 10 January, President Abdul Fattah al-Sisi directed the government to continue releasing all goods stuck at the country’s ports and simplify all customs clearance procedures.

One source said: “Project exposure to the current currency crisis in Egypt is going to vary considerably.

“Some projects are likely to get through these issues with minimal disruption while others could potentially experience delays that last for years or even cancellations.”

Industrial projects, energy projects and construction projects all have the potential to be impacted by the ongoing turmoil in Egypt’s economy.

It is likely to have severe implications for some stakeholders within Egypt as well as ramifications for regional partners and suppliers.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10520648/main1301.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • QatarEnergy gives North Field West topside bidders more time

    2 October 2026

     

    QatarEnergy has granted contractors more time to prepare bids for a tender covering the engineering, procurement, construction and installation (EPCI) of large platforms for the North Field gas field in Qatari waters.

    Contractors now have until 12 October to submit technical bids for the project, according to sources. Commercial bids are currently due on 10 November.

    The following contractors, among others, are understood to be bidding for the North Field West (NFW) production deck modules (PDMs) tender:

    • China Offshore Oil Engineering Company (China)
    • Larsen & Toubro Energy Hydrocarbon (India)
    • McDermott (US)
    • Saipem (Italy)

    The core scope comprises the EPCI of four PDMs and associated structures. The PDMs will increase gas production from North Field reservoirs and provide additional gas feedstock for the NFW liquefied natural gas (LNG) development.

    The tender, issued earlier this year, forms part of the wider NFW project, the third and final phase of the state enterprise’s North Field LNG expansion programme.

    The previous deadlines for technical bids were 30 August, 15 September and 28 September, while commercial bids were previously due on 25 October, as MEED reported.

    Before issuing the PDMs tender, QatarEnergy awarded US firm McDermott a contract for the EPCI of four offshore jackets that will also support gas feedstock supply for the NFW LNG project. The contract is estimated to be worth about $200m, MEED reported in January.

    North Field LNG expansion

    QatarEnergy is advancing the three phases of its estimated $40bn North Field LNG expansion project. EPC works on all three projects are progressing.

    QatarEnergy is understood to have committed nearly $30bn to the first two phases – North Field East (NFE) and North Field South (NFS) – which will lift Qatar’s LNG production capacity from 77.5 million tonnes a year (t/y) to 126 million t/y by 2028.

    QatarEnergy awarded the main EPC contracts for NFE in 2021. The project was intended to raise LNG output to 110 million t/y by 2025. The $13bn EPC package – covering the EPCI of four LNG trains, each with a capacity of 8 million t/y – was awarded in February 2021 to a consortium of Japan’s Chiyoda and France’s Technip Energies.

    In May 2023, QatarEnergy awarded the $10bn main EPC contract for NFS to a consortium of Technip Energies and Consolidated Contractors Company (CCC). The contract includes two LNG trains, each with a capacity of 7.8 million t/y.

    Once fully operational, the first two phases are expected to add 48 million t/y of LNG supply to the global market.

    QatarEnergy took the final investment decision on NFW earlier this year, awarding an EPC contract estimated at $8bn to a joint venture comprising Technip Energies, CCC and Gulf Asia Contracting in February.

    Chiyoda carried out the front-end engineering and design work for the NFW LNG project.

    The NFW scope covers the EPC of two LNG trains with a combined capacity of 16 million t/y, as well as associated facilities for gas treatment, natural gas liquids recovery and helium extraction.

    In addition to LNG, NFW is expected to produce about 175,000 barrels of oil equivalent a day of condensate, ethane and liquefied petroleum gas.

    With all three phases under EPC execution – and NFE scheduled for commissioning later this year – QatarEnergy is positioning itself to remain one of the world’s largest LNG suppliers in the long term.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20208200/main.jpg
    Indrajit Sen
  • Egypt implements oil and gas storage projects worth $1.1bn

    2 October 2026

    Egypt is implementing oil and gas storage projects worth a total of £E54bn ($1.1bn), according to a statement released by the country’s cabinet.

    Active developments include expanding El-Hamra Petroleum Port in El-Alamein on the Mediterranean coast, as well as building a jet-fuel storage and transport hub at the Badr depot in Cairo.

    Other projects include constructing new storage tanks at refinery complexes in Amreya, Alexandria; Assiut; and Cairo.

    Over the past 12 years, Egypt has built 84 petroleum storage facilities with a total capacity of 5.2 million tonnes, the cabinet statement said.

    Egypt has invested £E42.7bn ($880m) in developing these facilities, with the aim of bolstering domestic energy security.

    Completed infrastructure projects include facilities in Sohag (Upper Egypt) and Alexandria.

    They also include offshore terminal and storage facilities, a liquid bulk station in Ain Sokhna, and strategic crude oil storage tanks across the country.

    Storage facilities have become a strategic priority for Egypt since the US and Israel attacked Iran on 28 February, triggering a regional war that has disrupted shipping through the Strait of Hormuz.

    The disruption has made imports of hydrocarbon products into Egypt less predictable, increasing the importance of strategic stockpiles.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20208195/main.jpg
    Wil Crisp
  • Bankability key to Saudi PPP pipeline

    2 October 2026

     

    Saudi Arabia’s National Centre for Privatisation & PPP (NCP) holds structured talks with bidders and lenders before launching transactions to ensure projects in its pipeline are bankable, according to a senior official.

    Speaking on a panel at MEED’s Shaping Mega Projects conference in Riyadh on 28 September, Tariq Alghaziri, executive vice-president at the NCP, said the centre carries out market sounding with potential bidders and debt providers, including commercial and Islamic banks, before announcing deals.

    “Bankability is a key word for us,” he said. “You can structure the deal in the way you want. You can have whatever technicalities and technologies are required, but is it suitable for the private sector to deliver? That’s the big question.”

    Alghaziri said the national privatisation strategy, approved at the end of 2025 and published at the start of 2026, sets the NCP’s targets up to 2030 and outlines its project pipeline. The strategy coincides with the third phase of Vision 2030, which he said is focused on measuring impact after earlier phases established the legal framework and enabled the private sector.

    Public-private partnership (PPP) contracts typically run for 25 years and, in some cases, more than 40 years, he said, which makes early engagement essential. “When we launch it, all the bidders, suppliers, EPC contractors, banks and ECAs are on the same page, and then they just have to align on commercial points and not negotiate legal aspects.”

    Risk transfer

    Jonathan Looker, managing director for Saudi Arabia at UK consultancy Mott MacDonald, said the public and private sectors often perceive risk very differently.

    "Can you put yourself in the shoes of the person you’re trying to transfer risk to?” he said. “There isn’t one single allocation model that is fit for every project.”

    Looker said failure to agree on risk can prevent projects from reaching financial close. "I’ve unfortunately been involved in a number of projects where we just can’t get the deal done because there is not a meeting of minds around a specific aspect of risk.”

    Alghaziri said Saudi regulations now state that the party with the capacity to manage a risk should take it, but that risk carries a cost. “You cannot just give the risk without pricing it,” he said. The NCP has trained more than 300 people over the past five or six years, including through a PPP professional certification it introduced in the kingdom.

    Early planning

    Hesham Ouf, senior director of finance at Roshn Group, the Public Investment Fund (PIF) subsidiary, said risk management begins at the feasibility stage. “You need to have the stage gates right from the beginning until the project is delivered,” he said.

    Ali Al-Kuwari, senior manager of export development at Qatar Development Bank (QDB), said early disclosure of procurement needs allows lenders to assess project risk. “For me, the answer is very easy. I’ll ask for a sovereign guarantee,” he said.

    Wesley Thomson, partner and head of environmental, social and governance (ESG) at UK property consultancy Knight Frank, said climate exposure is becoming a central risk for long-life assets. “Mitigation is not the right word any more. I prefer to say adaptation, because the truth is you need to adapt to what we’re seeing.”

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20207592/main.png
    Colin Foreman
  • Financing hinders progress at major Iraqi refinery project

    2 October 2026

     

    Financial problems are hindering progress at Iraq’s Al-Faw Investment Refinery project, according to industry sources.

    Despite the main contract being signed more than two years ago, construction of the main refinery units has yet to begin because of ongoing financial issues, sources said.

    In May 2024, a statement released by the Iraqi Prime Minister’s Office said that Iraq’s state-owned Southern Refineries Company and China National Chemical Engineering Company (CNCEC) had signed a contract to develop the project.

    Iraq’s Oil Ministry previously said the project would be worth $7bn-$8bn.

    The project has struggled to make progress even after direct intervention by Iraq’s previous prime minister.

    On 6 August 2025, 15 months after the May 2024 contract signing with CNCEC, Mohammed Shia Al-Sudani, then prime minister, chaired a special meeting to resolve administrative and technical obstacles preventing the project from starting.

    At the time, Al-Sudani said the refinery project would have significant financial returns and would be “a breakthrough in the oil industry”.

    While the meeting in 2025 is believed to have solved some of the administrative issues blocking progress, financial problems with the project remain, sources said.

    The Al-Faw project is part of the Iraqi government’s plan to increase Iraq’s refining capacity, attract foreign investment and increase domestic production of petroleum products.

    Under existing plans, the refinery will have a capacity of 300,000 barrels a day and will produce oil derivatives for both domestic and international markets.

    The project will be carried out in two stages.

    The first phase will involve refining operations, while the second will involve constructing a petrochemicals complex with a capacity of 3 million tonnes a year.

    The project also includes building a 2,000MW power plant and establishing the Al-Faw Academy for Refinery Technology to train 5,000 Iraqi workers who will eventually work at the facility.

    Hualu, a subsidiary of CNCEC, signed a preliminary principles agreement for the project in December 2021.

    Due to material price inflation since December 2021, some insiders believe the project value may now be significantly higher than the previously estimated $7bn-$8bn.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20207119/main.jpg
    Wil Crisp
  • Saudi pre-budget leans on borrowing to fund projects

    2 October 2026

    Saudi Arabia plans to spend SR1.39tn ($371.2bn) in 2027, according to the Finance Ministry’s pre-budget statement. That is 3% less than the estimated outturn for 2026, after regional conflict and the closure of the Strait of Hormuz pushed this year’s expenditure well past its allocation.

    The ministry now expects 2026 spending to reach SR1.44tn, which is SR122bn or 9.3% above the SR1.31tn approved in the budget. Revenues are estimated at SR1.19tn, SR43bn above budget, leaving a deficit of SR245bn, equal to 4.9% of GDP. The original budget assumed a SR165bn deficit, or 3.3% of GDP.

    For 2027, the statement projects revenues of SR1.2tn and a deficit of SR191bn, or 3.6% of GDP. Expenditure is forecast to rise to SR1.48tn in 2028 and SR1.54tn in 2029, with deficits of SR177bn and SR192bn projected for those years. On the ministry’s figures, the kingdom will run cumulative deficits of SR560bn ($149.3bn) between 2027 and 2029.

    The economic backdrop has deteriorated sharply. The ministry expects real GDP to contract by 3.6% in 2026, driven by a 21.8% fall in oil activity, while non-oil activity grows by 3.2%. It forecasts a rebound to 12.8% real growth in 2027.

    Capital spending

    The statement does not publish a capital expenditure figure or a sector breakdown. Those will follow with the budget in Q4. It does signal that project spending will continue. As Vision 2030 enters what the statement calls its third phase, the government says efforts will focus on “accelerating the pace of delivery and capitalising on growth opportunities through continued government capital expenditure”. It also wants a stronger role for the Public Investment Fund (PIF) and the National Development Fund in stimulating domestic investment.

    The ministry says it will “implement infrastructure-related programmes” and direct resources “towards priority programmes and projects”. It also commits to “maximise the utilisation of existing government assets and investments”. That wording points to a sharper focus on completing and monetising existing schemes rather than launching new ones.

    The medium-term debt strategy is designed to ensure “the continuity of the implementation of priority projects without being linked to the fluctuations of the economic cycle”, according to the statement.

    The government’s revenue scenarios hold expenditure at SR1.39tn in all three cases. Under the lowest revenue case of SR1.13tn, the deficit widens to SR259bn. The highest case of SR1.26tn narrows it to SR132bn. Any change falls on borrowing rather than on spending.

    The ministry says debt will deliberately rise by the end of 2027, and the borrowing plan will be disclosed by the end of this year. Alongside bonds, sukuk and loans, the government plans to expand “alternative government financing, including financing of projects, infrastructure and export credit agencies” in 2027 and over the medium term.

    Private capital

    The statement presents private investment as a growing share of project delivery. Investment in privatisation and public-private partnership (PPP) projects reached about SR180bn by the end of 2025. The National Privatisation Strategy was approved in November 2025. Ten privatisation and PPP projects have been launched under it in the first half of 2026, including the Prince Naif Bin Abdulaziz International Airport PPP in Qassim. Contracts were signed for the Sabic Mental Health Hospital and the Jubail Container Terminal, taking the total to 83 partnership contracts. Private capital investment has exceeded SR56.2bn, against a target of SR240bn by 2030.

    The National Infrastructure Fund has committed SR10.5bn since 2022 to projects with a combined value of about SR59.3bn, of which SR44.1bn is private investment. Projects it has backed include the Neom green hydrogen project, the Shuaibah solar photovoltaic plants, the Prince Mohammad Bin Abdulaziz Airport expansion, the Jubail-Buraidah independent water transmission pipeline and the Ezditek data centre. The fund plans to expand into healthcare, education, sports and artificial intelligence.

    PIF’s domestic investments totalled about SR750bn between 2021 and 2025. The statement lists several recent contracts across its portfolio. Diriyah Company, the PIF-owned developer of the Diriyah gigaproject, awarded a SR1.8bn contract to a consortium of local companies to build the Saudi Museum of Contemporary Art. PIF-owned Soudah Development signed a SR1.3bn agreement with National Grid SA, the transmission subsidiary of Saudi Electricity Company, to deliver electricity infrastructure for the Soudah Peaks project. Saudi Entertainment Ventures, also owned by PIF, plans 14 destinations across 13 cities, with investment of more than SR45bn. The Saudi Export-Import Bank plans to provide SR41.6bn of financing and insurance to non-oil exporters in 2027.

    Logistics investment has also become a priority since the disruption to Gulf shipping. The share of non-oil exports passing through Red Sea ports rose to 40.7% during the crisis, from 19.3% before it. In July, the General Ports Authority signed contracts worth up to SR1bn for seven logistics centres at Jeddah Islamic Port and Al-Khumrah. A separate logistics corridors initiative connects Gulf ports to the Red Sea by road and rail.

    The final 2027 budget is due for approval in Q4.

    MEED’s October 2026 report on Saudi Arabia includes:

    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20206117/main.gif
    Colin Foreman