Why should you care about infrastructure projects in Egypt?

In recent years, the Egyptian government has made significant investments in infrastructure projects. While these projects present valuable opportunities for local, regional, and international suppliers, they also come with challenges. In this article, we will explore the driving factors behind major infrastructure projects in Egypt and provide examples of projects currently underway.

The key drivers of the industry

Egypt is a young and dynamic country. With a population of 116 million (2024), it is the third most populous country on the African continent and the most populous in the Arab region (Worldometers). Its population growth rate is 1.75% annually, meaning it adds 2 million people each year, equivalent to the population of cities like Vienna or Brussels

The median age in Egypt is only 24 years, 14 years younger than in countries like China or the United States. As a result, Egypt's labor force is growing rapidly. Egypt is already ranked 20th globally in terms of the largest labor force (33 million people), recently surpassing France (32 million; World Bank)

The effects of this young population on infrastructure investment are twofold. First, a larger working population, especially relative to the total population, increases economic activity. This economic activity generates demand for more infrastructure. Second, the Egyptian economy and its government need to invest to drive job creation, not only once the roads, railways, and waterways are completed, but also during their construction process. For the government, infrastructure projects in Egypt therefore have a very high priority.

Government investment in infrastructure projects in Egypt

Investment in infrastructure projects in Egypt, especially by the Egyptian government, has been significant. In 2024, Egypt is hosting large, ongoing, and future infrastructure projects worth $85 billion. The total value of government projects even reaches $187 billion, making Egypt the leader in Africa, far ahead of South Africa ($120 billion)

As a negative side effect, public debt has grown at an alarming rate. In 2023, Egypt's debt-to-GDP ratio reached 96%, up from 88.5% the previous year. Along with a currency devaluation, this has led to a debt crisis currently affecting the country.

To combat the short- and medium-term effects of this crisis, Egypt has had relative success in securing international investments, especially from its Arab neighbors. The country has also been in talks with the International Monetary Fund (IMF).

Industry outlook

Despite the recent debt challenges, there have been no widespread delays or cancellations in Egypt's transportation infrastructure projects so far. Over 90% of the projects are generally on schedule. In other major African economies, this rate is significantly lower; for example, 70% in Ethiopia, 73% in Nigeria, and 75% in South Africa.

Medium- and long-term outlook for the Egyptian economy

Despite the recent debt challenges, the medium- and long-term outlook for the Egyptian economy is positive. Growth in 2022, before the current challenges arose, was 6.7%. Despite a slowdown in 2024 (3%), the IMF predicts that growth will accelerate again to 5.9% by 2029.

The total GDP in current dollars grew from $294 billion in 2012 to $475 billion in 2022. In 2024, this figure dropped to $347 billion, still placing Egypt as the second-largest economy in Africa. The IMF projects significant expansion to $539 billion by 2029, at which point the country will be the largest economy on the continent.

Similarly, in terms of purchasing power parity, Egypt's GDP per capita is expected to grow from nearly $18,000 (second in North Africa) to over $22,000 by 2029 (first in North Africa).

These key drivers provide a solid foundation for several of the ongoing and future infrastructure projects in Egypt. Below, we will look at some examples.

Key ongoing transportation infrastructure projects in Egypt

October 6 Railway – Luxor – Aswan – Abu Simbel
Also known as the Express Electric Train Line 2 or the Blue High-Speed Line, this railway project is estimated to cost a total of $13 billion.
It involves the construction of a 1,100 km high-speed railway that will run on the western side of the Nile. It will start from 6th of October City, west of Cairo, and extend to Aswan, on Egypt's southern border with Sudan. With 36 stations and a maximum speed of 250 km/h, the line is expected to transport about 3.4 million passengers per year.
The project is being developed by Egypt's National Authority for Tunnels, as well as the National Railways of Egypt. French companies Egis and Systra are supporting the project as managers. The contract was awarded in 2021. The main contractors are Orascom, The Arab Contractors, Hassan Allam, and Siemens Mobility.
The project is expected to be completed by 2027.

Gargoub Port
The Gargoub Port project involves the development of a port located 70 km west of Marsa Matruh City. The port includes the construction of a maritime port, an economic zone, an industrial and logistics zone, and associated facilities. Additionally, the master plan includes the construction of an airport, a desalination plant, residential areas, and energy facilities.
The project developer is Egypt's Ministry of Transport. The contractors are Kased Khair General Supplies and Contracting, and Canal Harbor and Great Projects Company, a subsidiary of the Suez Canal Authority.
Construction began in 2015 and is expected to be completed by mid-2028.

Suez Canal Expansion
The Suez Canal is one of Egypt's main sources of foreign currency. The Suez Canal expansion project aims to double the canal's navigable waterway (80 km of canal) at a total cost of $10 billion. The current feasibility study is expected to last 16 months.
The project developer is the Suez Canal Authority. The consultants involved are Dar Al Handasah and ACE Moharram Bakhoum.
Construction is scheduled to begin in mid-2026, with completion expected by 2034.

Source of the article: ABiQ