1. A New Energy Tariff for Companies:

1-      In coordination with the Ministries of Petroleum, Electricity and Energy, a new energy tariff has been developed to be implemented once approved by Egypt’s Supreme Energy Council. The price of natural gas for industry will increase gradually over the next three years, from $1.25 to $2.65 per BTU, taking into consideration that the world price is $5.5 per BTU. Also, the price of electricity will increase, from 11.1 to 17.8 piaster per kilowatt. It is planned that up prices of natural gas & electricity will gradually reach cost recovery over three years.

2-      Meanwhile, the Minister of Trade and industry affirmed that the new energy tariff will save L.E 15 Billion from the budget over the coming three years. The new prices will not affect the consumers but will be applied to 40 companies operating in industries that consume large volumes of energy – as intensive labor companies are excluded - such as Aluminum, Steel, Cement, and Fertilizers, taking into consideration that a companies list will be published and reviewed.

3-      This amendment aims at reaching prices which cover production costs so as factories with intensive consumption of energy obtain gas and electricity at cost rather than at market price. Then, these factories must adjust their production and financial structures to absorb the increase in production cost gradually over three years.

4-      H.E pointed out that the 40 companies' products are sold in accordance with the world prices and zero duties except cement. In addition to that, these companies use 55% of energy devoted for the industrial sector (75% of natural Gas subsidies& 61% of electricity subsidies) although their contribution in the industrial output and industrial employment are no more than 20% and 7% respectively.

2. Visit of Mitsubishi Delegation to Egypt:

1. A delegation of the Japanese Mitsubishi Group headed by their chairman visited Egypt on the 13 and 14^th of August. They met with the minister of investment and the chairman of GAFI to discuss the means to increase the group's investments in the Egyptian market.

2. The minister of investment stressed that his ministry is keen on attracting Japanese investments in light of the success of their current investments in Egypt. He further shed the light on the economic reforms in Egypt namely taxes and tariffs reforms, as well as, the facilitation of investment procedures, which has reflected positively on the flow of foreign direct investments to Egypt, which grew from $2 billion in 2003-2004 to reach    $10 billion in 2006-2007. The contribution of the private sector in investments grew from 45% to 70% and the GDP reached 7%, with foreign reserves over $28 billion.

3. The chairman of the Japanese group noted the current the development in the investment climate in Egypt during the visit of the Japanese prime minister to Egypt last June, which encouraged the group to increase their investments in the Egyptian market. He noted the interest in the cement sector as well as transport, gas, chemical industries and cooling transport.

4. The delegation met also with the minister of petroleum to discuss cooperation in the petroleum, gas and petrochemical sectors in light of the success of Japanese companies in this field especially in exploration and fields development in Suez gulf, the western and eastern desert, and the liquidation projects in Damietta.

5. During the meeting it was discussed the possibility of the japans side's collaboration with Tharwa petroleum company to explore in new areas inside and outside Egypt.

6. The chairman of the group stressed the importance of cooperation in this field with Egypt which provides a good market for investments especially in view of the success of the past cooperation between the Japanese companies and the Egyptian petroleum sector.

3. Four Public Insurance Companies to Merge:

1-      The Minister of Investment adopted a plan for merging the four public sector insurance companies. The companies are Misr, Sharq, Ahlia for insurance, and Masria for reinsurance. The merge decision will be implemented next month after confirmation of the plan by the general assemblies of the companies and this process will take about six months to be completed by March 2008.

2-      The Minister explained that the investment consortium - consisting of several companies and international banks with international experts, those are responsible for assessing and restructuring the four public companies - mandated since 2005 to study the insurance sector in Egypt ended to the difficulties of raising public sector insurance companies to a strategic investor and that it is better to create a big entity insurance in the Middle East, despite owning of public companies to 74% of the market volume in the presence of 22 private companies but the overall share decline annually by intensive current competition.

3-      The restructuring plan has entered the implementation phase in terms of numbers of personnel required for the four governmental insurance companies, getting relevant external expertise, and the preparation of an integrated database. In addition to the separation of real estate assets owned by these companies particularly those with the historic character.

4-      Furthermore, he asserted that the insurance market will have a new addition after several companies applied for a license. This comes to face the current challenges monitored by many experts and observers especially the limited size of the insurance market, services marketing constraints, and fierce competition from foreign companies, as well as the challenges of rising insurance rates.

5-      worth mentioning that 2006 witnessed the beginning of movement to develop the insurance sector by establishing a Holding Company for insurance and the Egyptian Company for the management of real estate assets -  a stock company affiliated to the Holding Company for insurance – for managing  and investing real estate assets transferred from the four companies.

4. Energy Sector

A)Transforming the Arab gas Pipeline to an Arab Gas Network and link it with the European one:

1-      Minister of Petroleum declared that an agreement was reached among Egypt, Syria, Jordan and Lebanon to transform the Arab Gas Pipeline to an Arab Gas network to be linked with the European one after joining Iraq, with the possibility of making use of other resources of gas to be pumped through this network to increase the economic return of the Pipeline's participating courtiers.

2-      H.E. declared after holding talks with Syrian Minister of Petroleum and Mineral Resources, Jordanian Minister of Energy and Mineral Resources, and charge Lebanese Minister of Energy that it was agreed upon forming a joint working group to study the use of this network in an adverse exchange among the participating Countries, which paves the way to greater flexibility in gas exports and imports among them.

3-      The Arab countries' Ministers, participating in the pipeline network, in addition to the Turkish Energy Minister, decided to carry out a field visit, for the first time, to the work sites of the Arab Gas Pipeline at Jordan, Syria and Lebanon (early next month). The Egyptian gas is scheduled to reach Syria before the end of the current year, and to Lebanon, early next year. Moreover, it was agreed that Syria would implement the 60 km length link inside its territories till the Turkish borders in preparation for linking the two networks by the next year.

4-      Furthermore, the Syrian Oil Minister affirmed that a study is being conducted between Syria and Iraq for the development of the Okas Iraqi gas field on the   Iraqi - Syrian borders in order to be connected with the gas Syrian network where the field is characterized by large reserves of gas. The Line will be extended from the Jordanian border to the city of Homs with length of 320 kilometers in 20 months and laying gas pipeline to Tripoli with length of 80 kilometers.

5-      Jordanian Minister of Energy clarified that initial agreement for increasing the exported gas quantities to his country has been completed, in order to meet the growing demand for energy and in accordance with the world oil prices developments.

6-      Moreover, Lebanese Minister of Energy said that the Arab gas will be utilized in developing and upgrading power generations in north Lebanon.

B) Libya and Egypt sign Agreements in Electricity and Power domains

1-      Minister of Electricity and Energy witnessed at the end of meetings of the Egyptian-Libyan joint committee on August 15^th the signing of six agreements that worth LE 2.5 billion in the domains of electricity and new and renewable energy. The contracts are considered the most ever enormous ones to be signed in the history of cooperation between the two countries as follows:

§         The first agreement: concerning effectuating the joint company between the two countries, the African company for electrical and mechanical projects.

§         The second agreement: Memorandum of Understanding comprising cooperation in renewable energy. 

§         The third agreement: consultations and engineering services to oversee the implementation of north Bengasi and Musrata stations.

§         The fourth agreement: participating in carrying out projects of a supply and installing air- lines.

§         The fifth agreement: participating in carrying out project of supply and installing stations.

§         The sixth agreement: participating in carrying out and establishment of air- lines.

2-      The press release at the end of meetings of the Egyptian-Libyan joint committee affirmed the readiness for cooperation and coordination in different scopes and activities. Also, The statement reviewed the existing cooperation between the two countries and ways to develop through what has been discussed in the meetings of the joint committee in the fields of electricity and energy projects that aim at strengthening the electrical grid between the two countries and the possibility of establishing a joint power station and develop cooperation between the two countries in the areas of clean and renewable energy scopes. In addition, setting up joint companies in carrying out projects for water reconnaissance, industrialization, and investment.