Cablegate: Opic: Damietta Port Project

VZCZCXYZ0001
RR RUEHWEB

DE RUEHEG #6859 3181234
ZNR UUUUU ZZH
R 141234Z NOV 06
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 2572
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0223

UNCLAS CAIRO 006859

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/ELA, NEA/RA, EB/IDF/OMA
USAID FOR ANE/MEA MCCLOUD AND DUNN
USTR FOR SAUMS
TREASURY FOR NUGENT AND HIRSON
COMMERCE FOR 4520/ITA/ANESA/TALAAT

E.O. 12958: N/A
TAGS: ECON EFIN ETRD EINV EG
SUBJECT: OPIC: DAMIETTA PORT PROJECT

Sensitive but Unclassified. Not for Internet distribution.

1. (SBU) The Ambassador and Nancy Rivera, OPIC Director of
Structured Finance, met with Minister of Transportation Mansour to
discuss the Damietta port project. Rivera explained that in order
for OPIC to help finance the project, the GOE would need to amend
the concession contract. The contract was approved by the Cabinet,
so any amendments would also need Cabinet approval. The first of
the amendments grants authority to the financiers to take control of
the operation if the project is failing. The second is to indemnify
the financiers in the event the GOE takes an action or passes a law
that adversely affects the project. Rivera explained that without
these clauses, not only would OPIC not participate, but the project
would not likely attract any international finance. Mansour agreed
to present the amendments to the Cabinet and was confident he could
obtain the support needed for approval.

2. (SBU) The DCM and Rivera also met with Minister of Investment
Mohieldin to brief him on the amendments. Mohieldin expressed his
support and shared Mansour's optimism that the Cabinet would approve
the amendments. He also asked for follow up on OPIC's expression of
interest in supporting projects in Egypt's real estate sector.
Mohieldin is the driving force behind GOE efforts to encourage
mortgage finance in the real estate sector, which currently operates
on informal financing schemes controlled by real estate developers.
OPIC President Mosbacher and Vice President for Structured Finance
Drumheller visited Egypt last summer to discuss the possibility of
OPIC backing for low-cost mortgage financing through commercial
banks. Rivera agreed to convey Mohieldin's request to the
appropriate OPIC officials in Washington.

3. (U) Background: The Damietta port project is a concession from
the Cabinet to a Kuwaiti company to build a private container
processing facility alongside the public facility in Damietta. The
GOE hopes that competition from the private facility will improve
overall services at the port. The Kuwaiti company is seeking
international finance for the project, including from OPIC.
Although the two clauses mentioned above are normally part of a
concession contract such as the one for Damietta, they were not
included in the Damietta contract.
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