President Sisi in one of his new palaces beneath a quote from the
Qur'an emblazoned in gold on the ceiling which reads: “And Pharaoh
proclaimed among his people: 'O my people, do I not possess the kingdom
of Egypt, and these rivers flowing beneath me? What, do you not see?'”
[Chapter (43) sūrat l-zukh'ruf (The Gold Adornment), Arberry
translation]
Cairo Scrambles as Israeli Strike on Iran Cuts Gas, Shakes Region
Following Israel’s overnight military assault on Iranian territory,
including Tehran and Natanz, the Middle East entered a phase of
heightened instability. Egypt condemned
the attack, warning of its impact on regional and international
security. The Foreign Ministry reiterated its commitment to a political
resolution to regional crises and rejected unilateral military actions.
The Egyptian armed forces were placed on high alert and conducted
nationwide air defence drills amid rising concerns about a broader
Iran-Israel conflict, according to sources cited by The National.
Combat units throughout the country, particularly in the Sinai
Peninsula, were placed on maximum alert, with air defence tests carried
out in nearly all 27 provinces.
Prime Minister Mostafa Madbouly held urgent meetings with the Central Bank and the Ministry of Finance to boost the strategic reserves of key commodities. EgyptAir canceled flights to Beirut, Amman, Baghdad, and Irbil.
Economically, the fallout was immediate. Bloomberg stated: ‘Egypt’s
pound weakened and its stock market plunged the most in five years as
the escalating conflict between Israel and Iran stoked fears of a wider
regional war. The pound was trading at 50.74 per US dollar at Cairo’s
banks by 12:45 p.m. on Sunday, down from about 49.8 last week. The
benchmark EGX30 index, meanwhile, tumbled as much as 7.7% on its first
day of trading since Israel struck Iranian nuclear and military
facilities. It later pared some of those losses.’
Moreover, Israeli gas supplies to Egypt and Jordan dropped sharply
after Tel Aviv halted production at its offshore fields in anticipation
of further escalation. Emergency protocols
were implemented to maintain the stability of the electricity grid and
reduce demand on natural gas. Coordination is ongoing to restart
disrupted imports, though officials remain uncertain about the timeline.
Sources confirmed to Mada Masr
that gas supply cuts had been made to the industrial sector. Egyptian
fertilizer producers were forced to halt operations on Friday, sources
told Reuters.
The following day, the government halted the supply of mazut and diesel
to factories that use them as fuel in industries such as food and
cement for a period of 14 days. The aim is to save around 8,000 tons of
mazut per day to meet the power stations’ needs until imported shipments
arrive, according to a government official speaking to Asharq.
Egypt uses mazut and diesel as supplementary fuels for power plants
alongside domestically produced and imported natural gas, especially
during times of gas supply shortages.
This marks the second major disruption in under a month, revealing Egypt’s deepening vulnerability to regional energy shocks.
Ironically, despite the crisis, Egypt began yesterday pumping natural
gas to Jordan at a rate of 100 million cubic feet per day to operate
power stations, following the disruption of supplies from Israel after
the outbreak of the war between Israel and Iran, according to two
officials from the Egyptian and Jordanian governments who spoke to Asharq
on condition of anonymity. In December 2024, Egypt had signed an
agreement with Jordan to make use of Egyptian infrastructure, including
floating storage and regasification units, to secure Amman’s liquefied
natural gas needs over the next two years.
Egypt has been attempting to simultaneously expand gas imports and
liberalise its electricity sector in response to domestic shortages and
international market pressures. The government has agreed to purchase up to 160 cargoes of liquefied natural gas
(LNG) through 2026, at an estimated cost exceeding $8 billion. This
marks a shift from Egypt’s earlier ambitions to export gas, following a
sharp decline in domestic production and recurring blackouts. Major
suppliers include Shell, Aramco, and Vitol, with deliveries priced at a
premium over the Dutch TTF benchmark and mostly structured with deferred
payments.
In parallel, the state is advancing electricity liberalisation
by granting licences to four renewable energy companies—Enara, Taqa
Arabia, AMEA Power, and Neptune Energy—to sell power directly to
industrial consumers using the national grid. This policy shift is
framed as part of Egypt’s green transition, although natural gas still
accounts for 79% of the electricity mix.
Taqa Arabia is 20% owned by the Egyptian military’s NSPO. Enara is a
privately held Egyptian renewables developer with backing from regional
investors. AMEA Power is based in the UAE, while Neptune Energy is
headquartered in the UK.
Egypt Among States Facing New US Travel Ban Threat
The Trump administration is considering adding Egypt to an expanded
travel ban list that includes 36 countries, according to a State
Department memo reviewed by The Washington Post.
The memo, signed by Secretary of State Marco Rubio, gives the listed
governments—including Egypt—a 60-day deadline to meet new U.S. security
and documentation benchmarks or face visa restrictions. This move marks a
significant escalation in Trump’s second-term immigration crackdown,
reigniting concerns about the discriminatory nature of such bans.
Sisi Mortgages Red Sea Coastline to Finance Debt
In a controversial move, Sisi has issued a decree allocating over
415,000 feddans (1,743,000,000 m²) of Red Sea coastline to the Ministry
of Finance “for the purpose of reducing public debt and issuing
sovereign bonds.” The decree, published in the official gazette on 4
June 2025, explicitly reserves strategic military land for the Armed
Forces, exempting it from sale. The decision sparked fierce backlash
online, with critics warning of further erosion of state assets and
raising alarms about the ongoing mortgaging of public property to meet
financial obligations.
This follows a pattern of land and asset transfers, especially to
Gulf allies, in recent years amid worsening economic conditions. The
move deepens public concerns about the long-term implications for
sovereignty, transparency, and the social contract.
The Finance Ministry stated on Thursday that the land would not be sold but would be used as collateral for sukuk (Islamic bonds) to reduce debt and finance the state budget.
The government intends to issue $1 billion worth of sukuk in a
private offering to the State of Kuwait, with plans to issue sovereign
sukuk in a public international offering starting from the new fiscal
year, according to officials speaking to Asharq.
Debt service has consumed approximately 62% of the government’s expenditure in the Financial Year 2024/25 and will eat up 62.8% in the FY 2025/26.
BCG to Oversee Egypt’s Military Privatisation Amid Backlash Over Gaza, Israeli Ties
On 9 April 2025, Egypt’s Cabinet signed an agreement with Boston Consulting Group (BCG) and other advisory firms
to restructure and privatise five military-owned companies - Wataniya,
Safi, ChillOut, Silos, and National Foods. This marks the first
large-scale privatisation of military enterprises since the
establishment of the National Service Projects Organisation (NSPO) in
1979, under ongoing pressure from the IMF to downsize the military’s
role in the economy.
BCG also began operations in Israel in 2010, offering consulting
services to leading firms in the technology, energy, defence, and public
sectors—many of which are directly linked to the Israeli army and
government. Notably, Israeli PM Benjamin Netanyahu worked as an economic
consultant at BCG between 1976 and 1978 after graduating from MIT.
The firm is also instrumental in establishing
the atrocious Gaza Humanitarian Foundation (GHF) in late 2024. Designed
as an alternative aid mechanism for Gaza, GHF was involved in creating
four tightly controlled aid distribution points in southern Gaza,
operating with direct coordination with the Israeli military. The system
led to deadly chaos, with dozens of Palestinians killed by Israeli
gunfire while queuing for food.
BCG’s dual role—consulting for both the Egyptian military’s
privatisation and coordinating Gaza aid with the Israeli army—has drawn
scrutiny over ethical conflicts and regional entanglements.
Fortress Europe Claims More Lives
The bodies of ten irregular migrants
washed ashore near Marsa Matrouh last week. The victims—a Libyan, a
Sudanese, and eight Egyptians—are believed to have departed from Libya.
The Libyan coast guard also intercepted a boat carrying 93 irregular
migrants from Egypt and Sudan yesterday.
Sudanese refugees fleeing war are increasingly abandoning Egypt for Libya and Europe
due to worsening conditions in Egypt, including economic hardship,
bureaucratic hurdles, and a government crackdown on migrants. Many face
detention or deportation, despite holding UNHCR status. A 134% rise in
Sudanese arrivals in Europe was recorded in early 2025, even as overall
migration dropped. Egypt denies mistreatment, but critics cite a 2024
asylum law and rising deportations. Libya, though dangerous, has become a
key transit point. Meanwhile, the EU has pledged €7.4 billion to Egypt
to curb migration, prompting criticism of its role in externalising
border controls.
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