ADQ opens Cairo office to boost investment in Egypt

Local presence builds on the $20bn joint strategic platform launched in 2019 by ADQ and The Sovereign Fund of Egypt

The Cairo skyline. Egypt's economy expanded 3.6 per cent in the fiscal year which ended on June 30. Reuters

Abu Dhabi’s holding company ADQ has opened a new office in Cairo as it seeks to increase its investment in the Arab world's most populous country.

The opening of ADQ’s new office complements the $20 billion (Dh73bn) strategic investment platform launched in 2019 between ADQ and The Sovereign Fund of Egypt (TSFE).

The platform aims to accelerate Egypt’s economic development through joint strategic investment projects, specialised funds and investment tools, in key sectors such as health care and pharmaceuticals, utilities, food and agriculture, real estate and financial services, ADQ said.

“We continuously seek opportunities to create value and harness the growth potential of our partnerships with sovereign investment entities,” Omar Mehanna, head of sovereign partnerships at ADQ, said.

“Opening our new Egypt office is an important milestone in our long-term commitment, by investing through our strategic investment platform, to unlock growth opportunities across key sectors. Our in-market presence will drive further cross-border collaboration while nurturing organisations that will accelerate the country’s economic development,” said Mr Mehanna.

Egypt was the only Middle East economy to grow last year amid the Covid-19 outbreak and its government was lauded for its swift policy actions to mitigate the pandemic’s effects.

North Africa's largest and the Arab world's third biggest economy expanded 3.6 per cent in the last fiscal year which ended on June 30, according to the International Monetary Fund. However, growth in Egypt will decelerate to 2.5 per cent this fiscal year due to the lingering effects of the Covid-19 pandemic on the economy, according to the lender, which is slightly above the World Bank's 2.3 per cent forecast.

In October, Egypt signed a memorandum of understanding with the OECD to launch a three-year country programme aimed at addressing some of economic challenges faced by the country.

“ADQ’s decision to establish an office in Egypt signifies the strength and depth of our bilateral co-operation which enhances our ability to develop and evaluate our joint-investment pipeline,” Ayman Soliman, chief executive of TSFE, said.

“Egypt has vast reserves of untapped potential across a diverse range of sectors and our partnership with ADQ illustrates our ability to attract foreign direct investment and stimulate Egypt’s economic development,” said Mr Soliman.

Established in 2018, ADQ is one of the region's largest holding companies with direct and indirect investments in more than 90 companies locally and internationally. It has been expanding its global footprint to accelerate Abu Dhabi’s transformation into a globally competitive and knowledge-based economy.

Last week, ADQ and Aldar Properties, the biggest developer in Abu Dhabi, acquired a majority stake in Egypt’s Sixth of October for Development and Investment Company for $386.8 million.

In April, the Abu Dhabi company acquired Egypt’s Amoun Pharmaceutical Company from Canada's Bausch Health for $470m, in a move that strengthens ADQ's long-term healthcare and pharmaceutical portfolio. Amoun operates one of the largest drug plants in Egypt.

Many of ADQ's portfolio companies have also invested in Egypt. AD Ports Group, in which the state holding company has a stake, signed an agreement with the Egyptian Group for Multipurpose Terminals, the commercial arm of the Egyptian Ministry of Transportation, to develop and operate a multipurpose terminal in Safaga Port on the Red Sea.

Under the agreement, AD Ports Group will explore investment opportunities and conduct feasibility and local market studies related to developing and operating the port, with both parties benefiting from exchanging expertise and best practice.

Last year, ADQ also invested $1bn in UAE retailer Lulu International Holdings to fuel its expansion in Egypt.