By: Shaimaa Ibrahim
Translation: Muhammad Khalid
Over the past eight years, the government has paid unprecedented attention to establishing industrial complexes, contributing to new productive sectors, job creation, and increasing national income.
From 2015 to the end of 2022, four new industrial cities and 17 small industrial complexes were established at an investment cost of EGP 10 bn across 15 governorates.
This year, the Ministry of Planning and Economic Development announced that the government is working to establish nine new industrial complexes, including two high-tech industrial complexes, during the 2023/2024 plan.
Additionally, the Board of Directors of the New Urban Communities Authority (NUCA) agreed to allocate about 12 mn sqm for industrial developers in four new cities; New Cairo, New Fayoum, New Alamein, and New Aswan.
Khaled Abbas, Chairman of the Administrative Capital Urban Development (ACUD), stated that the company is working on the designs of the 2,000-acre industrial zone in the New Administrative Capital (NAC), with completion expected in the second half of 2023. The designs will then be presented to investors, reflecting requests from industrial development companies.
All this affirms the growing importance of industrial real estate in the coming period. Through the following article, Invest-Gate sheds light on efforts to advance this sector and evaluates the performance of the industrial real estate sector in the first half of 2023.
Government Efforts
Minister of Trade and Industry Ahmed Samir stated that at the beginning of 2023, the National Industrial Development Strategy (2022 2023/2026-2027) was launched.
Prepared by the ministry, the strategy aims to achieve five main goals, including achieving an 8% industrial growth rate, increasing the industry’s share of GDP to 20% with annual industrial export growth of 18-25%, and expanding the shift towards green industries and a circular economy to achieve $100 bn in exports.
Regarding the system for allocating industrial lands, the government is keen to facilitate pricing and make industrial lands available for investors.
The Cabinet issued a declaration to form committee No. 2067 of 2022, headed by the Public Authority for Industrial Development. This committee is concerned with unifying the entity dealing with investors to establish industrial projects.
Moreover, the Minister of Trade and Industry confirmed that the total area of industrial lands allocated by the committee since its formation amounts to about 1.2 mn sqm for 219 industrial projects.
In addition, the Cabinet approved setting the prices of industrial lands offered to investors and making them available through ownership and usufruct systems, while issuing regulations for controlling the allocation process and providing financial and procedural facilities to the process of land allocation.
Facilities for Allocating Industrial Lands
According to the Ministry of Trade and Industry, the number of approved industrial zones in Egypt reached 147 affiliated with seven entities, with a total area of about 1.7 mn acres, in addition to 17 industrial zones under the industrial developer system with a total area of 22.7 mn sqm.
Mohamed Abdel Karim, Chairman of the Industrial Development Authority (IDA), revealed that the IDA’s portfolio of land available for investors amounts to 2,303 plots, with a total area of 7.76 mn sqm across 18 governorates.
During 2023, the Ministry of Housing, Utilities, and Urban Communities provided new facilities for industrial developers, including a period for paying the land value. Accordingly, allocating the land will be in two phases, with an implementation period of five years maximum for the two phases. In addition, at least 35% of the main works and buildings for the first phase need to be completed to receive the second phase, besides, full payment for the two phases has to be paid according to the initial approved price of the project.
The ministry also provided installment periods commensurate with industrial investors by granting the developer a two-year grace period from the date of paying the contract amount for the first phase, provided that the remaining 75% of the first phase value is completed in four equal annual installments at the industry support interest rate determined on the date of payment.
As part of the IDA’s endeavor to quickly provide industrial lands with complete facilities for investors, the authority adopted the program for the New Generation of Industrial Clusters – The Industrial Developer – through a successful partnership with the private sector.
This allows companies to develop, facilitate, and manage industrial zones through international bids to meet the challenge of scarce adjacent industrial lands, as the industry’s need for adjacent lands exceeds 7 mn sqm annually, while what the state provides does not exceed 3 mn sqm only.
Abdel Karim confirmed that the IDA has reactivated the mechanized industrial investment map and offers more than 2 mn sqm of adjacent
lands across the country.
He stated that the authority provided unprecedented facilities to the industrial community, most notably granting a six-month grace period for projects within or outside the implementation schedule upon immediate payment.
Tarboul Industrial City
The Tarboul city project, implemented by the GV Investments Group, is located on 109 mn sqm in Giza. Tarboul includes several investment areas with different industrial activities.
Sherif Hamouda, Chairman of GV Investments, said that the Tarboul city project covers an area of 26,000 acres and aims to localize basic and complementary industries, value-added industries, export industries, recycling industries, and smart logistics services.
The plan includes establishing a smart transportation and internal transportation network in the city, which is expected to accommodate 2 mn people and be built in seven phases.
Hamouda stressed that the Tarboul project is one of the most important industrial projects, aiming to attract global attention to Egypt as an industrial country influencing many sectors, and providing competitive incentives for investors.
The economic impact of Tarboul City will provide over 700,000 job opportunities for the people of Upper Egypt, considering the city’s 13,000 industrial establishments. GV is adopting a world-class infrastructure development plan for the city, in partnership with international companies and experts.
Industria October City
In January 2023, the Cabinet unveiled that a plan for an industrial city project to be established in New Cairo City is being studied.
Regarding the process of allocating the lands required to establish the project, Assem El-Gazzar, Minister of Housing, indicated that it is possible to prepare a specific timetable for the development process of the region.
The required lands will be allocated in two stages, and in the event of proving seriousness in the first stage, the land needed to implement the second phase will be obtained, he added.
Moreover, Prime Minister Mostafa Madbouly stated that the government had received a request from the El Sewedy Electric Group to establish a new industrial zone in New Cairo City planned to be implemented under the industrial developer system near the 6th of October Dry Port.
Ahmed El Sewedy, President and CEO of El Sewedy Electric Group, explained that Industria October is planned to be one of the largest industrial cities in Egypt on an area of 5 mn sqm, with varying land uses between industrial, logistical, commercial, and administrative, and service activities. The city will be directly connected to the port of Alexandria via railways, El Sewedy added.
The top executive highlighted that the project’s components include an administrative area, services, a commercial area, an industrial area, a warehouse area, a logistics area, and others.
He revealed that the project will be implemented in three phases, aiming to add about EGP 5 bn annually to Egypt’s gross domestic product (GDP) after completion, attract local and foreign investments worth EGP 20 bn, provide more than 150,000 job opportunities in various industries, and build and develop more than 400 factories and about 100 logistical and commercial facilities.
Green Industrial Area
Last April, the IDA announced its intention to establish the first green industrial zone in cooperation with the United Nations Industrial Development Organization (UNIDO), relying on clean energy and recycling all waste from manufacturing operations in a manner consistent with the principles of sustainability and environmental protection.
This aligns with the Egyptian government’s sustainable development strategy, “Egypt’s Vision 2030,” and the goals of transitioning to a green economy and reaching net zero emissions.
Green industrial development has become a global trend aiming to reduce greenhouse gas emissions leading to rapid climate change. The Intergovernmental Panel on Climate Change (IPCC) estimates that carbon dioxide emissions from industry and electricity will reach 14 gigatons by 2023.
Abdul Karim said that the authority’s plan includes creating an attractive industrial investment climate, achieving sustainable development, transitioning to a green economy, and developing specialized industrial cities.
The plan also includes studying and determining the comparative advantages of governorates in terms of location and natural resources to identify promising industrial investment zones capable of attracting global investments, Abdul Karim added.