Egypt picks IFC as strategic advisor for asset monetisation scheme
Egypt has chosen the International Finance Corporation (IFC), the World Bank‘s investment arm, as its strategic advisor to the government’s asset monetisation programme that will focus on harnessing private capital and know-how to manage state-owned assets.
“Today we appoint the IFC as the government’s strategic advisor for the Asset Monetisation Programme, leveraging on its experience in supporting private sector companies in emerging markets.” Prime Minister Moustafa Madbouly said in a statement on Sunday.
The statement follows IFC’s signing of a Transaction Advisory Services Agreement (TASA), aiming to join forces with the Egyptian government to boost private sector participation in the economy – helping to increase competitiveness, create jobs, and improve living standards for Egyptians.
The asset monetisation programme is part of the government’s State Ownership Policy (SOP), a new framework launched in December 2022 aiming to empower the country’s private sector across sectors to spur economic growth.
As per the TASA, the IFC will provide the government with technical assistance and advisory support to develop a strategy and implementation plan, help structure and prepare assets for sale – including improving corporate governance – and ultimately implement selected approved transactions.
This is the first agreement within the World Bank Group Egypt Country Partnership Framework, jointly developed with the Egyptian government and launched in March 2023.
“The IFC is uniquely placed to play this role given its neutrality, strong reputation, broad global experience in privatization transactions, IPOs, trade sales and PPP tenders; multi-sectoral experience, and deep ties with strategic and financial investors focused on Egypt.” Madbouly further said.
“Through the new agreement signed, the IFC will work in close coordination with the Egyptian cabinet’s Asset Monetisation Unit to operationalise and implement the privatisation strategy and harness private capital.
The agreement will structure and prepare assets for sale – including improving corporate governance – and ultimately the implementation of selected approved transactions in the second phase of the programme, the prime minister added.
“IFC has been a key partner of Egypt for several decades,” stated Makhtar Diop, IFC managing director.
“Our appointment as strategic advisor to support the sale and monetization of state assets will further unlock the potential of the private sector to build a sustainable, resilient, and inclusive economy for Egypt.” Diop added.
IFC has a strong track record of supporting governments worldwide, attracting private sector investments in state assets. It has led transactions of asset monetisation for state companies in Kenya, Brazil, and Cameroon, among others, raising private investment for the governments. In addition, IFC has also structured public-private partnerships for critical infrastructure such as Queen Alia International Airport in Jordan and the Hajj Terminal in King Abdulaziz International Airport in Saudi Arabia.
IFC’s appointment is a significant milestone in its longstanding relationship with the Egyptian government to increase private sector participation in the economy. Initiated by the Ministry of International Cooperation and in partnership with the Prime Minister’s office and the Central Bank of Egypt (CBE), IFC’s support will help the programme attract private investment into Egypt.
Rania Al-Mashat, Minister of International Cooperation and Egypt’s Governor at the World Bank, said: “IFC is the largest global development institution focused on the private sector in emerging markets and one of its biggest programs is in Egypt.”
“The Transaction Advisory Services Agreement between Egypt and the IFC expands the partnership and is the first operation to be signed under the recently launched 2023-2027 Country Partnership Framework with the World Bank Group, specifically supporting the government’s SOE reform agenda and harnessing private capital.”
As the Egypt’s strategic advisor for the Asset Monetisation Programme, Al-Mashat further said the IFC will provide advisory support and technical assistance to identify a privatisation model for each SOE, acknowledging the potential target investors, and defining the sale process for each SOE under the programme.
“Monetisation of state assets is one of the most critical requirements to Egypt’s economic development,” said Hassan Abdalla, CBE Governor.
“The Central Bank of Egypt is proud to contribute to this multi-stakeholder effort that signals to the world – clearly – that Egypt is open for business.”
