In an era that has witnessed the United States doling out billions of dollars worldwide in military and developmental aid, two grants signed in August 2008 in Cairo represent a renewed effort by the American government to bring greater returns on its investment.
U.S. Ambassador to Egypt Margaret Scobey signed the two grants, emanating from the United States Trade and Development Agency (USTDA), totalling over $600,000 [USD].
The grants signal an increased focus by the United States on giving developing countries what Ambassador Scobey referred to at a press event in Cairo on August 27, 2008 as “trade, not aid.”
Through the American Embassy, the USTDA gives grants to fund feasibility studies for development projects. The feasibility studies establish a comprehensive plan, using industry experts and engineers, for carrying out a project’s vision.
USTDA Regional Director Carl Kress, who was available for a question and answer session following Ambassador’s Scobey’s speech, announced that his agency’s mission was to “help support a project, get it off the ground.”
The EgyptAir Maintenance and Engineering Company won a grant for $444,284 to fund a study intended to aid the company in developing a new information and communications technology (ICT) solution for aircraft technology. Another grant for a feasibility study went to Al Arabia for Industrial and Touristic Development for $172,754 in order to plan the construction of an integrated sugarcane and ethanol plant near Aswan in Upper Egypt.
“We hope that today will mark the countdown,” wrote Zakaria Serag El-Din, Chairman of Al Arabia, in a thank-you note to Ambassador Scobey following receipt of the award, “for the date of implementing a project which will contribute to the sincere efforts of the Egyptian Government in developing Upper Egypt in cooperation with the private sector.”
Although Al Arabia is a privately owned firm, EgyptAir is a public company. These grants show the willingness by the United States government to work with both the private and the public sector. The USTDA has funded over $10 million in projects in Egypt since 1984, according to Kress.
The principle behind the feasibility study grants aims not to give tens of millions of dollars to underwrite development projects but to give smaller, targeted sums that will encourage, rather than fully fund, development.
Once the feasibility studies are completed, EgyptAir and Al Arabia will likely seek funding through Egyptian banks to follow through with the projects.
In addition to trying to spur growth through smaller grants, the United States also hopes to receive a direct return on its investment.
After being approved for USTDA grants, the local companies are required to select a US-based company to carry out the study. Upon completion of the study, the Egyptian companies are free to follow through on their projects with any partner they choose, international or domestic.
After awarding the feasibility study grant, the United States government hopes to help, informally, see the project through to completion.
“The Commerce Department steps in to work with the grantee to see if they have any needs,” said Amer Kayani, Counsellor for Commercial Affairs at the U.S. Embassy in Egypt. “If there is capital needed, they bring in overseas partners.”
The USTDA also works with the Egyptian government so that the two entities’ efforts complement one another. Asked about the developmental priorities of the Egyptian government, Kayani replied, “Their priorities are to encourage the private sector.”