26 January 2015       Download

Ahmed Heikal, Chairman and Founder of Qalaa Holdings and Hisham El-Khazindar, Co-Founder and Managing Director of the company were part of the Egyptian private sector at the 2015 World Economic Forum’s annual meeting in Davos

Ahmed Heikal, Chairman and Founder of Qalaa Holdings (CCAP.CA on the Egyptian Exchange; formerly Citadel Capital), an African leader in infrastructure and industry, gave audiences at the World Economic Forum the private-sector perspective on the challenges and opportunities that Egypt currently faces as it strives to rebuild its economy amidst an energy crisis and limited fiscal resources.
“We need to look beyond immediate concerns to more fundamental issues, because we have today a once-in-a-generation opportunity for a reformist government not just to lay the foundation for a more secure energy future, but to create whole new industries — and perhaps hundreds of thousands of jobs in the process,” said Heikal. “We can do so by delving into two questions: What’s the optimal energy mix for Egypt? And how can we most efficiently harness the resources we have today.
“Staying the gutsy course upon which we embarked last July when the administration began removing fuel subsidies is key,” said Heikal. “Behavior is key to efficiency, and nothing ensures responsible behavior — on the part of consumers and business alike — than market prices alongside a cash-based social safety net for the most needy in society.”
Heikal spoke at a dinner session headlined “Shaping Egypt’s Economic Transformation,” at which Egyptian President Abdel Fattah El Sisi gave a keynote speech outlining Egypt’s economic roadmap and his 2020 vision for the Egyptian economy. Other speakers at the session included Trade and Industry Minister Mounir Abdelnour and Finance Minister Hany Demian, as well as Martin Sorrell, CEO of global public relations giant WPP.
“With the state’s energy subsidy bill for the current fiscal year already down c. 30%, I would argue that the Government of Egypt should consider channeling some of the windfall into both exploring a healthier mix of energy sources (one that includes renewables) — and into new industries to derive maximum benefit from those resources we have. In parallel, we need to convince some 90 million people to change their behaviors as we move from a ration-based system to one of cash transfers for the needy,” said Heikal, who offered the closing remarks for the presidential dinner to voice the views of the Egyptian private sector.
“The new legislation that has been passed by the Egyptian government in the last 3-4 months is very promising, but we must stay the course and not shy away from bold measures,” said Qalaa Holdings Co-Founder and Managing Director Hisham El-Khazindar. “‎President El Sisi sent at the World Economic Forum this year a clear and important message to the global business community that Egypt is heading in the right direction.”

Qalaa Holdings invests in energy as one of its core industries. The company’s energy portfolio includes investments in refining, energy distribution, power generation and renewables. Its largest energy investment to date is the Egyptian Refining Company (ERC), a US$ 3.7 billion refinery that has the potential to more than halve Egypt’s present-day diesel imports and reduce by nearly one-third the country’s current sulfur emissions when it starts production in 2017.
Concluded Heikal: “On a one-year, three-year and ten-year horizon, Qalaa has been the largest investor in Egypt. We look to play our part in the future. Today, the risks are declining and economic policies are clearer. We will continue investing behind our existing assets. In my mind Egypt, offers a very attractive risk-return trade off — so much so that today, 90 percent of my personal wealth is in Egypt. My bet is that Egypt will roar.”