Egypt is finalizing a privatization strategy for 11 airports, including Hurghada International (HRG), the country’s second busiest for passenger traffic after Cairo. The Red Sea gateway is expected to come to market before the end of the year.

Structured as a public-private partnership (PPP), this latest plan is being supported by the Washington-based International Finance Corporation (IFC), a member of the World Bank Group. Specifically, the IFC is advising Egypt’s Ministry of Civil Aviation (MoCA) on a strategy for partnership development with the private sector for all 11 earmarked airports. They represent a significant portion of the country’s domestic and international air travel.

As a pilot project, IFC is the lead PPP transaction advisor for HRG. The organization will support the MoCA and the Egyptian Holding Company for Airports and Air Navigation (EHCAAN) in issuing a public competitive tender to select an experienced strategic private partner to upgrade, maintain, and operate the airport. Ownership of the airport will remain with EHCAAN.

IFC’s Vice President for Africa, Sérgio Pimenta, commented: “Enhancing Egypt’s airport infrastructure through PPP will drive economic growth and boost connectivity in the country and across the wider region. This program will help attract world-class investors to deliver modern, efficient airports that strengthen Egypt’s position as a global travel and trade hub.”

Tourism is a Major Factor

In 2022, Egypt’s tourism minister said he wanted to push up tourism numbers from 11 million at the time, closer to 40 million by 2027.

Enhancing airport infrastructure to increase capacity is essential in supporting this goal and improving service quality. Doing this and retaining state ownership was likely to take much longer than a privatization program. Both President Abdel Fattah El-Sisi and Prime Minister Mostafa Madbouly have said that international partnerships to transform and modernize Egypt’s airports are their preferred route.

At the end of March, Madbouly stated that the IFC agreement would boost private sector participation in Egypt’s air transport sector, and he reaffirmed his commitment to the strategic partnership. The decision to focus on PPPs will hasten modernization and should increase foreign investment.

The privatization project also forms part of Egypt's Vision 2030 strategy, a longstanding plan launched in 2016. However, in light of post-COVID and other economic challenges—at global, regional, and national levels—over the past seven years, the Ministry of Planning and Economic Development updated the first version of the plan in 2023, particularly with respect to its approach in engaging development partners from the government, the private sector, and civil society.

A Tender Pipeline is Planned

Among the six strategic goals of Vision 2030, the fifth one, to ensure a ‘well-developed infrastructure’ is the most important from an airport perspective. It recognizes the importance of “establishing secure and sustainable transportation systems” from the Suez Canal and electric traction within the rail network, to developing a comprehensive system of roads, bridges, ports, and airports.

Within the aviation sector, Egypt currently boasts 27 airports, with both international and domestic facilities. This is in addition to Marsa Alam and Alamein airports operating through partnerships with the private sector under build-operate-transfer (BOT) initiatives.

The establishment of three new airports and ongoing development projects at Cairo Airport to increase its capacity also signal a determined effort to accommodate a rising demand for air services, from passengers, cargo, and tourism.

The other 10 airport candidates—which could be bundled or offered as individual sale transactions—are:

• Sphinx International
• Sharm El Sheikh International
• Borg El Arab International
• Luxor International
• Aswan International
• Sohag International
• Assiut
• Abu Simbel
• El Alamein International
• Marsa Matruh.

No timeline on PPPs for these gateways has been announced.

In Egypt, the IFC helped successfully structure and close the country’s first PPP in 2010: the landmark New Cairo wastewater treatment plant. Since beginning operations in the country in 1975, IFC has invested and mobilized $9 billion in development projects. The institution’s support in Egypt has focused on a variety of sectors, including fintech, climate finance, manufacturing, infrastructure, renewable energy, and healthcare.