Egypt: SACE’s fossil business comes first

SACE, the Italian export credit agency owned by the Ministry of Economy and Finance, is playing a major role in Egypt. Its historical financial exposure to the regime exceeds EUR 4 billion.

Egypt’s importance in SACE’s portfolio can be seen in the two guarantee transactions issued for the Middle East Oil Refinery (MIDOR) and the Assiut Oil Refinery (AOR), both owned by the state oil company. The former, located near Alexandria about two kilometres from the Mediterranean Sea, ranks among the top ten refineries on the African continent. For its construction, SACE guaranteed an amount of EUR 1.2 billion, while for Assiut the amount was slightly higher: EUR 1.32 billion. For both projects, the Italian Cassa Depositi e Prestiti (CDP, development bank owned as well by the Ministry of Economy and Finance) also benefited from the guarantee.

illustration ©Gabriel Vigorito/ReCommon

For the Assiut project, journalistic sources spoke of strong hesitations on the part of CDP, which led to a major delay in the final signature, which only arrived on 14 February 2022. CDP’s fears, were confirmed by journalist Stefano Vergine’s reconstruction in an article published in Il Fatto Quotidiano newspaper on 7 November. Vergine writes that “according to what has been reconstructed by Il Fatto, it was precisely CDP, also owned by the Ministry of Economy and Finance like SACE, that contributed to the delay in approving the project”. The delay – says a source who followed the dossier closely – was due not only to Egyptian bureaucracy but also to CDP. While there were no problems for SACE, Cassa Depositi e Prestiti was hesitant about the transaction. In June 2021, when taking office as CDP’s CEO, Dario Scannapieco took charge of the Assiut dossier and stopped it due to reputational fears linked to the Regeni murder case. Then the Presidency of the Council of Ministers intervened and persuaded Scannapieco to unblock the financing and so the go-ahead came. It would therefore have been Mario Draghi who forced his hand, pushing Cdp to finance the project and thus putting SACE in a position to guarantee credit”.

Notwithstanding the denials or silences of the case, there is a growing suspicion that in the name of business as usual SACE has ‘removed’ the painful muder of the Italian researcher Giulio Regeni – for which the Egyptian police is strongly suspected – from the factors to be taken into account when assessing whether or not to support a project of this magnitude.

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