Monday,27 May, 2019
Current issue | Issue 1285, (3 - 9 March 2016)
Monday,27 May, 2019
Issue 1285, (3 - 9 March 2016)

Ahram Weekly

Teaming up with Japan

Samia Fakhry reports on the outcome of President Abdel-Fattah Al-Sisi’s visit to Japan

Al-Ahram Weekly

The Japanese capital Tokyo received President Abdel-Fattah Al-Sisi for a four-day visit this week, the first by an Egyptian head of state in 17 years. The visit, which saw an address by Al-Sisi to the Japanese lower house of parliament, resulted in the signing of multiple memoranda of understanding and loan agreements promoting cooperation between the two countries.

Soft loans worth $500 million will finance the construction of a passenger terminal at the Borg Al-Arab Airport near Alexandria, at a cost of $152 million; increase the efficiency of Egypt’s electricity companies, at a cost of $243 million; and fund the construction of a 20-MW solar power plant in Hurghada, at a cost of $91 million.

The loans will carry an interest rate of between 0.1 and 0.3 per cent and are to be repaid over 40 years with a grace period of 10 years.

Japanese and Egyptian companies signed more than 10 memoranda of agreement. Japanese companies are set to take part in Egyptian projects worth about $17.7 billion in the electricity and other sectors, Reuters reported Japanese Prime Minister Shinzo Abe as saying after meeting Al-Sisi in Tokyo.

Agreements were also signed promoting cooperation in the field of education, and 2,500 Egyptian students and trainees will be dispatched to study in Japan over the next five years under a new bilateral education partnership.

Japanese trading house Marubeni may help build Egypt’s largest power plant, a project equivalent to a tenth of the country’s generating capacity and expected to cost more than $3.54 billion, the Nikkei Asian Review website reported.

Marubeni and Egypt’s state-run electricity company were scheduled to sign a memorandum of understanding on Wednesday on a feasibility study for the proposed four-million-KW coal-fired power station. “An assessment of the project’s financial viability and a decision on whether to begin construction are to be made within a year,” the website said.

Trading house Mitsubishi Corporation and industrial company Mitsubishi Heavy Industries are expected to sign similar agreements with the Egyptian government to explore the possibility of building a total of 1.3 million KW of natural gas-fired combined-cycle generating capacity, the website said.

Japanese companies are interested in projects in areas such as the power sector, renewable energy, oil, gas, water, the development of the Suez Canal region and other projects, Ken Mukai, chargé d’affaires at the Japanese Embassy in Cairo, told Al-Ahram Weekly.

Japanese direct investment in Egypt in the 2014-2015 fiscal year reached $50.6 million. Trade between Japan and Egypt has almost doubled over the last 10 years, and in 2014 reached $1.7 billion.

However, there were obstacles that need to be tackled with regard to direct investment, Mukai said. He highlighted issues such as import and export restrictions and foreign currency issues. These were among the issues discussed by the business councils and officials of the two countries, he said.

Japanese tourist flows to Egypt also remain below their potential. Egypt is one of the most popular tourist destinations for the Japanese people, and many Japanese would like to visit Egypt at least once in their lifetimes, Mukai said.

Due to recent events, however, parts of Egypt, and even the whole region, have been identified as off-limits for Japanese visitors. Mukai said that Japanese visitors have been advised that Cairo, Luxor, Aswan, and Hurghada are all safe to visit. In 2015, some 10,000 Japanese tourists visited Egypt, compared to 126,000 in 2010.

Japan is currently working on three major projects in Egypt: the Egyptian-Japanese University for Science and Technology (EJUST), the Cairo Metro and the Grand Egyptian Museum (GEM).

EJUST will be a centre of excellence for exchange and co-operation with Japan in the field of higher education and scientific research, Mukai said. Construction of the new campus is ongoing, and the Faculty of Engineering and other facilities are scheduled to open in 2017, he said.

“We expect many excellent Egyptian students will enter this university, and we expect it also to start accepting African students. We want it to be a centre for African development,” Mukai said.

The Japanese government is considering the provision of equipment for the Faculty of Engineering at EJUST. At present, the university is only slated for graduate students, but it will later expand to include undergraduate students, Mukai said.

Regarding the Cairo Metro, this aims at easing traffic congestion in the capital by using state-of-the-art technology from Japan. The cars used on line four of the metro, connecting the centre of Cairo with Giza, will be manufactured by Japanese companies, Mukai said.

A third area of cooperation is the construction of the GEM. “This is a very large project that symbolises the very close co-operation between the two countries. Japanese loans and technical cooperation are being provided, and the construction work is ongoing, aiming for a soft opening in 2018,” Mukai said.

A $300 million loan was provided for the museum, but another loan is being sought in order to continue the construction.

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