Citadel Capital Co-Founder Discusses Egypt’s Challenges During Period of Transition at Euromoney Conference



Hisham El-Khazindar, Co-Founder and Managing Director of Citadel Capital, discusses Egypt’s transitional period and the challenges that the country faces as it attempts to address structural problems and move forward with its political road map

Citadel Capital Co-Founder and Managing Director, Hisham El-Khazindar took center stage at the Euromoney Egypt Conference to discuss some of Egypt’s most pressing economic issues as well as Citadel Capital’s transformation into an investment holding company and the role that the firm hopes to play in growing Egypt’s economy.

“Egypt has been stuck in a period of transition even before the January 25th revolution,” said El-Khazindar. “Long before the revolution, we were facing complex structural issues such as the energy subsidy system and the system of taxation and how it relates to social justice.”

When asked what had changed in Egypt post-revolution, El-Khazindar acknowledged that there are some positive steps that have been taken.

“The first positive is that the present government is the most competent cabinet that we have seen in the past 3 years. From a funding point of view we are also in a much stronger position. The funding that we have gotten from the Gulf States has allowed the current government to achieve a temporary state of normality that we didn’t have a few months ago. Extreme fuel shortages and mass blackouts have abated for the time being,” said El-Khazindar.

“The negative side of this return to normalcy is that it’s superficial. The fundamental problems that we had 6 years ago have not yet been tackled. We do not yet have a proper welfare structure in place, energy subsidies have not been dismantled and the importation of energy has not been opened up. The energy problems are crucial because without access to sufficient sources of energy new companies cannot be established which places a constraint on future economic growth.”

“Despite the fact that we have a competent government that is fully aware of what we are dealing with, the tough measures that are necessary to solve our current problems have not yet been taken,” he added.

Commenting on the issue of energy subsidies in particular El-Khazindar pointed out that as long as the subsidy debate is positioned as removal vs. status quo, nothing will change.

“The solution to the subsidy conundrum is to present the issue as a provision of a new social security package for citizens in need rather than a subsidy removal. Cash subsidies, which have been successful in countries such as Brazil and Iran, will have a much stronger social impact than the present system,” said El-Khazindar.


Irrespective of the current challenges, Citadel Capital the leading investment company in Africa and the Middle East with US$ 9.5 billion in investments under control has been actively pursuing its business goals. The firm is now completing a c. USD 520 million share issuance that will fuel its transformation from a hybrid private equity firm into an investment holding company with majority ownership of most of its platform companies in five core industries: energy, transportation, agrifoods, mining and cement.

“We have never been a traditional private equity firm. We are long-term investors who invest to build businesses rather than buy and sell businesses. The transformation into an investment holding company is simply an adaptation of our structure to reflect our strategy,” said El-Khazindar.

The new structure will also allow Citadel Capital to focus on the industries that it knows best and where it can have the greatest impact. Post revolution, the firm completed one of the largest-ever project finance transactions in Africa (the US$ 3.7 billion Egyptian Refining company). The project, which will reduce Egypt’s present-day diesel imports by more than half, is a key component of Egypt’s energy security.

“With projects like ERC we hope to provide solutions to some of Egypt’s most pressing economic problems,” said El-Khazindar.