The move comes as part of the fund’s strategy to expand investment in the industrial sector and encourage greater private-sector participation in industrial projects and related services.
The board of the Sovereign Fund of Egypt for Investment and Development has approved the establishment of the Egypt Industrial Investment Sub-Fund, with authorized capital of EGP 10 billion and issued capital of EGP 1 billion.
The move comes as part of the fund’s strategy to expand investment in the industrial sector and encourage greater private-sector participation in industrial projects and related services.
Under the decision, the new sub-fund will be wholly owned by the Sovereign Fund of Egypt. The sovereign fund will pay EGP 500 million of the issued capital upon establishment into the sub-fund’s bank account, while the remaining amount will be paid in cash or in kind within five years, subject to board approval.
The issued capital will be divided into 500,000 equal units with a nominal value of EGP 1,000 each. Assets may also be transferred from the Sovereign Fund of Egypt to the sub-fund at market value in accordance with the law governing the sovereign fund.
The new fund will target investments across the industrial sector with the aim of improving its sustainability and efficiency, while encouraging investors to inject new capital into Egypt’s industrial, supporting services and logistics sectors.
Its mandate also covers the development of infrastructure linked to these activities, the establishment of new industrial projects and the expansion of existing ones.
The fund may diversify its investments across different industrial segments through partnerships with the private sector and investment institutions, while adhering to governance and transparency principles in line with international standards.
It will also be permitted to cooperate with Arab and international sovereign and investment funds, financial institutions and companies in pursuit of its targeted investment returns and in accordance with its investment policy.
The decision authorizes the fund to make direct and indirect investments, either independently or in partnership with the private sector, across a range of industrial activities.
It may also develop, manage, utilize or own buildings, land and other industrial assets, either directly or through funds and companies in which it holds stakes alongside other entities.
The sub-fund may establish companies, funds and other investment vehicles or participate in capital increases. Its stake will generally be capped at 50 percent of any investment, although the board may approve a higher share depending on the nature and scale of the investment.
Its activities may also include borrowing, obtaining credit facilities and issuing bonds, sukuk and other debt instruments.
The fund will be allowed to buy, sell, lease, rent and utilize fixed and movable assets, as well as provide loans or guarantees to investment funds and companies in which it holds stakes.
The sub-fund will operate for 99 years from the day following publication of its establishment decision in the Egyptian Gazette and on the Sovereign Fund of Egypt’s website. The term may be extended by a decision of the sovereign fund’s board.
It will have independent legal personality as well as financial and administrative autonomy and will operate as a private-law entity.
Its headquarters and legal domicile will be located in one of the Greater Cairo governorates, while branches and offices may be established inside or outside Egypt with board approval.
The fund’s governance structure will include a general assembly and a board of directors comprising between five and 11 members, appointed for renewable three-year terms.
An executive director with relevant investment experience will also be appointed for a renewable three-year term.
The fund’s resources will include its capital, transferred assets, returns generated from investments and asset management activities, loans, credit facilities and other resources approved by its board.
