The long-awaited demerger of the Netherlands-based OCI NV, which will create an independent Orascom Construction, is expected to have a big impact on the projects sector in Egypt.

The demerger will mean that Orascom Construction will be listed on the Nasdaq Dubai exchange, but, more significantly, it will also list on the Egyptian exchange. In addition to adding some much-needed liquidity to the Egyptian market, the move is likely to boost work opportunities for Orascom in the country’s impending projects boom.

While the demerger is a clear business decision to enable Orascom to focus its operational strategy and raise extra capital, it is one that will significantly improve the company’s reputation and standing in the Egyptian market. This is potentially lucrative for the firm, with a number of major projects expected to be tendered and awarded in the next 12 months as the new government moves ahead with an ambitious infrastructure programme.

The demerger will mean that Orascom Construction will effectively become an Egyptian company, and many in the country’s construction sector are expecting Orascom to win numerous major public projects at a time when the authorities are pushing a populist rhetoric of investment and development. The firm is likely to be treated as favourable contractor when bidding for many government-supported projects.

Moreover, the demerger will be completed in time for the Egypt Economic Development Conference, being held on 13 March. It has been reported that $20bn worth of projects will be announced during the two-day conference, with a number of private and public initiatives expected to be confirmed.

Following the politically fuelled tax dispute with the previous Muslim Brotherhood government, Orascom is likely to be welcomed back to the country’s projects sector, given its track record of delivering major and complex construction schemes.

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