When an airport currency exchange bureau employee opens his drawer to reveal it is  empty, it is never a good sign.

Egypt’s hard currency shortage is now affecting key infrastructure projects.

Abu Rawash wastewater treatment plant developers, local Orascom Construction Industries, France’s Veolia and Spain’s FCC Aqualia will not move towards financial close until they have access to foreign currency to import technology.

Developers under the renewables feed-in tariff scheme are facing a total $2.5bn - $3bn gap in financing, but are concerned they will not be able to obtain dollars to cover the 70-85 per cent of their costs in hard currency, for equipment needs.

For every economist, developer and financier working in Egypt, currency risk is the biggest obstacle to foreign investment and securing project finance.

The recent moves by new Central Bank governor Tarek Amer have been seen in a positive light. He has restricted luxury goods imports and raised the foreign currency deposit limit to $1m for exporters and $250,000 for other businesses.

He is expected to carry out a managed devaluation in 2016. This would bring the official exchange rate, currently E£7.83 to the dollar, closer to parallel market rates of around E£9.

Egypt also needs to revive and diversify its traditional sources of foreign exchange; tourism, remittances and the Suez Canal. The current tactic of seeking foreign aid is unsustainable.

Taking a longer view, Egypt experiences currency crises around once a decade, and tends to resolve them in 18 months.

A liberalisation – moving towards a floating rate against the dollar – could theoretically avoid these periodic shortages. But the Egyptian market may not be ready for a free float, and the Central Bank has ruled out such a move before reserves reach $25bn.

Liberalising could introduce high levels of uncertainty over pricing - a new type of currency risk.

Philippa Wilkinson