| Project Detail |
The impetus for this Technical Assistance (TC) is observed underinvestment into data centres (DCs) in Egypt—with prospective investors highlighting regulatory challenges related to access to land, construction permits, and broadband licensing as key constraints. The TC aims to analyse these challenges and develop targeted policy recommendations. Egypt’s is a prime candidate for data centres investments. Its strategic location linking Europe, Africa, and the Middle East, coupled with extensive access to terrestrial and submarine cables, positions it as a key hub for international data traffic. The country’s proximity to established regional DC hubs, including Saudi Arabia and the United Arab Emirates, creates opportunities to serve the rapidly growing markets of Africa and the Middle East, particularly in latency-sensitive and cost-conscious segments like content delivery. And indeed, Egypt’s skilled workforce and abundant renewable energy potential provide a distinct competitive advantage. Yet, Egypt’s DC sector remains undercapitalised. The country’s DC capacity is comparable to Morocco’s, a country with a third of Egypt’s population and GDP. While international players have considered entering the market, they are notably absent. Local and regional investors cite barriers that include lengthy processes for construction permits and land licensing; challenges accessing key network infrastructure; and data protection regulations that diverge from international best practice and deter hyperscalers from storing data in Egypt. This represents a missed opportunity. As foundational digital infrastructure, DCs stimulate innovation, generate employment, and drive economic growth. In Egypt, the Information and Communications Technology (ICT) sector is especially dynamic, achieving a growth rate of 15.2% in 2022, surpassing overall GDP growth and contributing 5.1% to the national economy. Expanding DC capacity could unlock further economic gains for Egypt. And indeed, DCs are a critical short-term strategic priority for Egypt according to the World Bank. This Technical Cooperation assignment seeks to identify and address the key bottlenecks impeding large-scale DC projects in Egypt, with the objective of unlocking new avenues for investment. The analysis will encompass a comprehensive review of policy, legal, regulatory, economic and other barriers constraining DC sector growth. By clarifying these challenges, the TC aims to create a more conducive environment for private sector investments in the sector, supporting Egypt’s potential as a regional DC hub. TC Services An external consultancy (the “Consultant”) will be retained to undertake a comprehensive diagnostic of Egypt’s DC market as well as the policy and regulatory framework governing the sector. Activity 1 - Market assessment: Analyse the size, growth trajectory, and competitive landscape of Egypts DC market, including key players, regulatory environment. Activity 2 - Analysis of constraints impeding large-scale DC projects in Egypt: Analyse the market, competitive, and regulatory factors hindering large-scale DC projects in Egypt, including opportunities and challenges to market entry, investment, and operations, covering both supply- and demand-side constraints. Activity 3 - Actionable recommendations: Develop recommendations to address regulatory gaps and barriers to investment. Recommendations must be evidenced-based and informed by stakeholder consultations, regulatory impact analyses, and best practices. The proposed solutions should align with Egypt’s context, balancing market needs with international best standards. Recommendations should be prioritised based on impact and government buy-in. Risks should be highlighted, and mitigation strategies developed. In developing recommendations, the Consultant should explore opportunities for locating data centres in special economic zones (SEZs) and examine models to strengthen cross-governmental coordination for the streamlined approval and effective delivery of data centre infrastructure projects. The report should also incorporate case studies from comparator countries that have successfully attracted large-scale data centre investments, highlighting key policy measures, regulatory frameworks, and best practices. The Consultant will use a combination of desk research, stakeholder consultations, and evidence-based analysis. This will include coordination with Ministry of Communication and Information Technology (MCIT), as relevant, for the organisation of in-person interviews of existing and potential DC investors; key user groups; telecom operators; relevant government bodies, including National Telecommunications Regulatory Authority (NTRA), Ministry of Finance, and Ministry of Planning and Economic Development, Ministry of Electricity and Renewable energy, Ministry of Petroleum and Mineral Resources. The Consultant is encouraged to identify and implement additional methodological tools and research activities as deemed appropriate to meet the Assignment’s objectives. |
