The second edition of the EGYPS Finance & Investment Summit, which took place on the second day of the conference, convened a galaxy of global finance and energy leaders who thoroughly debated the future of governance, investment, and cost management models for the energy value chain whilst paving the way for a global decarbonized economy.
And as multinational companies begin venturing into untapped markets to safeguard their continuity, the EGYPS Finance & Investment Summit served as a perfect venue for investment leaders to share experiences and how they are revisiting their business models and investment strategies whilst complying with evolving economic scenarios that ensure their business survival.
Reactivating Global Economies through Pioneering Fiscal Policies
During a ministerial keynote speech, Minister of Finance Mohamed Maait showcased how governments and global financial entities have been crucial in helping the world recover from the recent economic turmoil, with Egypt being the basis for his argument. Maait highlighted the crucial role of government bodies, particularly the Ministry of Finance, in realigning fiscal responsibilities to address the immediate priorities through various stimulus packages.
Maait maintained that economic and sustainable growth will continue to be the main priority of the Egyptian government and the Ministry of Finance. “Egypt has consistent growth over the years, recording a 5.3% and 5.6% in 2017, 2018, 2019 and then dropped during the pandemic to 3.3% in 2019/20. Such levels are still important given the global slowdown and the challenges faced as a result of covid,” he said.
“As for our growth projections, we target a growth rate of more than 5.7% in this financial year of 2021/2022. In 2022/2023, we project that we will also grow by about 5.7%, putting us back at pre-covid growth rate levels,” Maait added, attributing this economic growth to sustainable investments, “In fact, green investments have reached around 30% of this year’s budget.”
Egypt was the first to issue green bonds in Africa and the Middle East, where in September 2020, the Ministry of Finance successfully issued the first sovereign green bonds in Africa and the MENA region for $750 million, the minister explained. It is important to shed light on the important projects funded by the green bond and its contributions to improving the Egyptians’ lives, he further stressed.
According to the finance minister, “in November 2021, the MoF made publicly available its first annual allocation and environmental impact report for the 15 national green projects that were financed through the proceeds of the green bonds. Of the total bond proceeds, 46% were allocated to green transportation projects and 54% to sustainable water and desalination management projects.”
In line with the MoF’s goals to diversify its resources, the ministry issued its first green loan for an amount of $1.5 billion from a group of international and commercial banks, the minister further noted, adding that the issuance of the loan was met by high demand. “I confirm Egypt’s continuous commitment towards sustainable development in partnership with the private sector and the ministry,” the minister concluded in his speech.
Supporting Energy Financing
In line with climate goals, speakers in a panel, which was entitled “Bolstering international partnerships to boost energy investments and support project financing”, attempted to present a full picture of the climate dilemma, the point of view of oil and gas supermajors and the point of view of those ready to finance institutions’ climate goals.
Understanding the significance of novel partnership and investment models in the energy value chain, David Chi, Regional Vice President and General Manager Apache, said that there is a lot of conversation about climate change, but in order to really have an effective approach, we do not have to curb energy, pointing that there is a growing need for clean, reliable, and affordable energy.
Sameh Sabry, Senior Vice President and Managing Director – Egypt, Wintershall Dea, talked about his company’s commitment to the energy transition and achieving net zero by 2030. “This commitment is in line with our position as the leading independent oil and gas company. Nevertheless, to achieve that, this will require a lot of effort,” Sabry said.
For the CEO of HSBC Egypt Todd Wilcox, the energy transition does not – and should not – happen overnight; on the contrary, it should take its time.
Forward-Looking Financial Strategies for the Energy Industry
Another key session under the title “Forward-looking financial strategies for the energy industry” convened finance leaders to sketch out the futuristic finance and investment strategies to maintain cash flow and business continuity and sustainability during price falls and economic volatility.
Maria Martin, Head of Corporate Finance at Energean, said “it is a really exciting time to be part of things… we need to be adapting,” adding that “we should look at gas as a transition.”
James Smith, CFO Capricorn Energy insisted that “the question that is missing from the debate who’s paying for that transition,” but then goes on saying, “I think we will see capital coming from different parts of the world.” On the other hand, Mohamed Mostafa, Head of Finance PICO Cheiron recommended that the process to convert to green economy should not be fast-tracked, and hence, rushed.
Advancing Digital Investments in the Energy Industry
The weak demand for commodities during the pandemic has heightened the importance of investing in digital technologies. This discussion during a session, under the title “Advancing digital investments in the energy industry for cost efficiency and resource optimization”, focused on the significance of digital investments in the energy industry to break operational silos, protect critical assets from cyber-attacks, and ensure a consistent return on investments in the long run whilst paving the way for a net zero economy.
“Some say the pandemic is the shining armor of digitization,” Karim Badawi, Managing Director – Egypt and East Mediterranean Schlumberger said, further explaining that the last two years have been instrumental, hammering on the power of human connection, digital enablement, modernization. “The Egyptian Upstream Gateway (EUG) came in the perfect time, while Egypt’s first digital bid round came in the middle of the pandemic,” he pointed out
“I would love to start just before the pandemic [when] H.E Minister of Petroleum and Mineral Resources Tarek El Molla was actually the executive responsible for the digitization of the sector,” Hoda Mansour, SAP Head of Business Process Intelligence EMEA South SAP said, adding that this why he had a very clear vision when it comes to digitization. “So, we proceeded full force, full speed, with a very clear vision,” she emphasized, adding “I think this also reflects the resilience that is coming from Egypt and the growth that Egypt witnessed in the pandemic.”
The summit comprised panels titled two other panels under the titles “Unlocking energy markets of the future; Supporting energy sector stability” and “Accelerating sustainable investments.”
Global Finance & Investment Awards Ceremony
Fully supported by and in alignment with the objectives of the Egyptian Ministry of Petroleum and Mineral Resources, the Global Finance and Investment Awards recognized the achievements of senior finance leaders and organizations in the global energy space for their contributions to the industry.
The winners and highly-commended of both categories were awarded in a ceremony during the Financial Investment Summit. The Global Finance Leader of the Year Award, which recognizes outstanding global finance leaders for their contributions to the growth and profitability of their businesses was shared by Sherine Zohdy, Finance Manager of Wintershall Dea and Ahmad Ali Binobood, Chief Financial Officer of Dragon Oil.
As for the Global Financial Institution of the Year Award, Banque Misr took home the prize. This category recognized global financial institutions and trade bodies that contribute to and support the energy sector.