EBRD and Egypt join forces in Dry Port PPP development

By Axel  Reiserer

EBRD and Egypt join forces in Dry Port PPP development

Roadshow for country’s first inland port

Promoting the preparation of public-private partnerships (PPP) to support infrastructure development, the EBRD and the government of Egypt have conducted  an investor road show in London for the country’s pioneering “6th of October Dry Port PPP”.

The project is the country’s first inland port PPP and the largest logistics centre in the Greater Cairo region, an area home to more than 20 million people. Extending over an area of nearly 100 acres, the dry port facility will include 13 specialised zones to receive and store containers, liquid and dry bulk cargo, multipurpose storage warehouses, an administrative area and customs offices, as well as an additional 300 acres for the logistics centre.

The project has been designed within the context of Egypt’s approved transport master plan, which calls for a system of nine dry port and logistics centres PPPs to be developed and tendered over the coming period.   

The preparation of the project has been funded by the EBRD Infrastructure Project Preparation Facility (IPPF), with an advisory team led by Mazars, with legal support from Allen & Overy and Sarie-Eldin & Partners, and technical support from Infralinx, iMC, Rendel and Mena Rail.

Freight and containerised traffic in Egypt’s ports has grown strongly in recent years and this is expected to continue. To cope with raising demand, there is a need for an Inland Customs Clearance Depot to relieve the congestion of the country’s ports.

Egypt’s Minister of Transport, Hisham Arafat, opened the road show on behalf of his government, which is strongly backing the recently approved project. Minister Arafat stated: “We are pleased to have reached this milestone with the EBRD’s IPPF, which has allowed us to launch the tender for this pioneering PPP.”

General Fouad El Sayed Osman, Chairman of the General Authority for Land and Dry Port (GALDP), the guarantor of the project, added: “This will be the first of several dry port PPPs in Egypt which form a strategic element of our logistics strategy for the country. We look forward to engaging with private sector partners.”

Matthew Jordan Tank, EBRD Head of Infrastructure Policy and Manager of the IPPF, said: “This is what the IPPF was set up to do: provide an efficient means for our public sector governments to work with experienced advisory teams to develop bankable PPPs. We think it will meet with a very good reception in the PPP market.”

Infrastructure development is one of the strategic priorities of the EBRD and one of the pillars of the Bank’s business activities. Every year the EBRD invests approximately 25 per cent of its new business across a diverse range of subsectors including rail, roads, urban transport, water/wastewater, ports, logistics, airports, district heating and cooling, facilities management, irrigation and solid waste management.

Infrastructure development creates the foundations that a society needs for the orderly operation of its economy and serves as a driver of growth, jobs, connectivity and competitiveness. In addition, there is also consensus that infrastructure development is critical for the delivery of the 2030 United Nations Sustainable Development Goals. The additional investment needed is estimated to be US$ 1-1.5 trillion annually over the next 15 years.

Although international financial institutions have significantly increased their activities, this goal can only by achieved with the much stronger involvement of the private sector. The EBRD’s Infrastructure Project Preparation Facility offers an improved support mechanism focused on bankable project preparation, coupled with a coordinated approach to infrastructure policy dialogue.

The aim is to mobilise and catalyse greater levels of private sector investment in infrastructure through support for PPP procurement approaches and an improved information flow in terms of preparation processes, key structural elements, how to achieve acceptable risk allocation and secure durable public support measures.

Egypt is a founding member of the EBRD and has been receiving investments from the Bank since 2012. To date, the Bank has invested €2.7 billion in 52 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services, and support for transport services. The EBRD has also provided technical assistance to more than 600 small and medium-sized enterprises in the country so far.