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Egypt ‘must boost investment’ for Nile returns

Cairo, May 26, 2010

Egyptian companies need to increase their investments in Nile basin states in order to gain more leverage in how water from the critical river source is used, the head of an Egyptian aid fund said.

Egypt, which relies on the Nile for almost all its water, is locked in a dispute with African states upstream which have challenged Cairo's claim to the lion's share of the flow.

Fatma Galal, who runs a $25 million government fund that delivers aid to Africa, said the Egyptian government's resources would have limited sway in the row that has prompted a flurry of diplomacy between Cairo and African capitals in recent weeks.

"When we have large investment projects, mutual interests will be more and only then can you be in a bargaining position," Galal told Reuters.

"That bargaining position won't come with our little fund."

Some Egyptian firms extended investments to upstream states.

Sewedy Cables has built a $36 million a power cable plant in Ethiopia and Cairo-based Citadel Capital has investments in Kenya, Uganda and Sudan.

But Galal said such investments needed to be bigger to give Egypt extra clout.

After a decade of talks, Ethiopia, Uganda, Tanzania, Rwanda, and Kenya signed a new deal on sharing Nile waters without Cairo to challenge treaties from 1929 and 1959, an era when colonial powers held sway, that secure Egypt the biggest share of water.

But Egypt, almost totally dependent on the Nile and already threatened by climate change, wants to protect its lion's share of the flow and fears that expected water shortages by 2017 will be inflated if projects like dams upstream cut that supply.

The fund, now worth $25 million, has been running for 30 years and has focused on training in supporting programs across Africa, including the Nile Basin. Although small, she said, Egypt's experience meant it could often understand problems recipients faced better than donors from more developed nations.

"We understand their simple needs and our simple ways and solutions are sometimes better able to cater to these needs because the gap between us is not as large as with other European donors for example," Galal said.

But on its own the fund was only a start, she said.

"Investment is the solution to our problems," Galal said. – Reuters




Tags: Egypt | investment | Cairo | Nile | Sewedy |

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