EGYPT Law and Practice Contributed by: Nadia Abdallah, Zahra Ashraf, Beshoy Mounir and Yasmine Attia, Matouk Bassiouny & Hennawy
5.7 Currency Control/Central Bank Approval There are currently no foreign exchange controls applicable in Egypt in relation to the M&A transaction itself. However, restrictions may apply for the transfer or repatriation of funds related to the deal. Conducting due diligence on banks requires the prior approval of the CBE’s board of directors. The Egyptian Banking Law and the relevant regula- tions issued by the CBE require any person, legal entity or related parties thereof that intend to acquire more than 10% of the issued share capital or the vot- ing rights of a bank (or any merger of a bank) to obtain the pre-approval of the CBE’s board. The appointment of key officials – eg, the chairman and board mem- bers, requires the pre-approval of the CBE governor. 6. Recent Legal Developments 6.1 Significant Court Decisions or Legal Developments Power purchase agreements and project and finance documents would generally be subject to arbitration and not local courts. For energy projects where the government is the offtaker, new approvals have been put in place to agree on international arbitration. In terms of policy, EgyptERA’s recently issued regula- tions have introduced Egypt’s first P2P schemes, thereby opening the market as envisaged under Law No 87 of 2015. Although these P2P regulations have not yet been sufficiently tested in practice, they are expected to serve as a significant catalyst for further development within the power market. 6.2 Key Developments in Renewable Energy and Cutting Emissions Egypt enacted Law No 2 of 2024, which outlines the incentives provided to green hydrogen production projects and their derivatives, subject to compliance with specific conditions set out under the law. Regarding carbon emissions, as part of its decarboni- sation efforts, Egypt officially launched its voluntary carbon credit market through Prime Ministerial Decree No 4664 of 2022, which amended the executive regu- lation of the Capital Markets Law. Pursuant to such
decree, a market for voluntary trading of carbon credit certificates is established within the EGX, where such certificates are recognised as tradable financial instru- ments. All governmental bodies, public and private sector entities, and project developers must notify the FRA and the Ministry of Environment of all projects in respect of which carbon credit certificates will be issued. To facilitate implementation, the FRA’s board of direc- tors has issued several decrees including (i) Decree No 31 of 2024 regulating the registration and can- cellation conditions of the carbon credit certificates within the EGX; (ii) Decree No 1732 of 2024 listing the requirements that must be satisfied by securities brokerage companies to obtain the FRA’s approval to trade carbon credit certificates; and (iii) Decree No 163 of 2023 in relation to the criteria for registering the entities responsible for verifying carbon credit projects with the FRA. 7. Due Diligence/Data Privacy 7.1 Energy and Infrastructure Company Due Diligence Potential investors may generally conduct due dili- gence on a listed company based on publicly avail- able information, including board meeting summaries, general assembly minutes, board and shareholder structures, and financial statements. Under applica- ble regulations, any further due diligence involving non-public information requires the target company to notify the EGX of the contemplated transaction and hold a board meeting to approve the disclosure of such information to the potential investor and its advisers. 7.2 Restrictions There are no explicit legal or regulatory restrictions that would limit conducting due diligence of an energy and infrastructure company.
121 CHAMBERS.COM
Powered by FlippingBook