The Sovereign Fund of Egypt (TSFE) is launching an innovation district in the Ministry of Interior’s former headquarters in Lazoghli in Cairo.
TSFE’s Real-estate Subfund and A Developments signed a development agreement to transform the complex into retail, technology hubs and incubators, office spaces, a branch campus for IPAG Business School of Paris, an International Business Process Outsourcing hub as well as hotel and hospitality components.
IPAG Business School partnered with TSFE to be the anchor tenant for the educational component, launching its first branch in Egypt. A Developments was awarded the development of the project following a competitive bidding process launched by TSFE in April 2022. A Developments’ focus on boutique developments as well as urban regeneration through adaptive reuse was key in selecting it as the master developer for this project.
Ayman Soliman, CEO of TSFE, said, “We are committed to reviving downtown Cairo and transforming it into an innovation and technological hub for our youth. This project is another manifestation, after Tahrir repurposing project, of TSFE’s investment strategy to preserving the city’s history while generating sustainable financial returns in partnership with leading private sector champions. We are proud to partner with a reputable Business School such as IPAG and are confident of A Developments’ expertise to turn our joint vision into a reality.”
TSFE will lease the complex to A Developments for 25 years, earning a fixed rental return and revenue share. The complex will be transformed by EGP800 million of investment by A Developments, which is set to see the first phase completed by end-2023.
TSFE’s has emerged as a lightning rod for investment in the Egyptian economy. Sovereign wealth will be a major long-term stabilizer for the Egyptian economy, which has faced increased pressure on its external position due to high imports and massive capital outflows. The slump in the value of the Egyptian pound has merely exacerbated the impact of rising energy prices following the Russian invasion of Ukraine. Financial support from Gulf Cooperation Council SWFs is therefore critical for a country with very slim external buffers.
In 2022, TSFE reportedly attracted more than US$3 billion in investments from Arab sovereign funds, across 14 projects including green hydrogen production, water desalination and education.
