In a recent report, HC Brokerage provided an update on Egypt’s construction sector, with a focus on Orascom Construction and the company’s exposure rebalancing, Invest-Gate reports.

Nesrine Mamdouh, an Industrials Analyst at HC, commented on the challenging operating environment in Egypt, noting that projects in the pipeline still offer moderate potential. She highlighted that Orascom Construction is actively rebalancing its exposure in the MENA region to seek potential opportunities.

Mamdouh stated, “We expect ORAS’s share of Egypt’s investments to soften to an average of approximately 3.1% in 2023–2027e (a proxy for its awards from Egypt), compared to 3.7% in 2018–2022. This is due to the government’s plans to scale down USD-intensive projects, while ORAS aims to target quality projects with a foreign financing component.”

Regarding the MENA region, Mamdouh mentioned that Orascom Construction is capitalizing on its flexible and diversified business model to increase its exposure to the GCC. The company has ambitious investment plans and mega projects to support the diversification of hydrocarbon-based economies. The total value of underway and planned projects in the GCC is estimated at USD 2.6 tn, with approximately 54% in Saudi Arabia and 21% in UAE.

Mamdouh concluded by highlighting the sustained business in the United States and the diversification benefits from Besix. She mentioned the US Infrastructure Investment and Jobs Act (IIJA) signed in 2021, which authorized USD 1.2 tn for transportation and infrastructure spending. Of this amount, USD 550 bn was allocated to new investments over five years in bridges, airports (with USD 15 bn provided by the Bipartisan Infrastructure Law for airport infrastructure funding), waterways, public transit, and more.