Fortnightly, 15 July 2015

Fortnightly, 15 July 2015

July 15, 2015





1.1  Bank of Israel Concerned About Household Credit
1.2  Israeli Private Power Producers Receive Licenses
1.3  Finance Ministry Advocates 3% Across-The-Board Budget Cut
1.4  Israel & China Add $500 Million to Financial Protocols


2.1  American Water Awarded Contract from BIRD Foundation
2.2  Shufersal Partners Join with JDA Software to Optimize Inventory
2.3  Intel Launches Israeli Startup Accelerator
2.4  Israeli Desalination Firm Named one of World’s Smartest Companies
2.5  Israel’s StageOne Ventures Closes $65 Million Second Fund
2.6  SafeBreach Raises $4 Million
2.7  Francisco Partners Completes Acquisition of ClickSoftware


3.1  Sysorex Announces $2.5 Million AirPatrol Contract
3.2  Dairy Queen Opens Newest Location in the United Arab Emirates
3.3  Eleventh Holding & Orvito Introduce IoT Products in Saudi Arabia
3.4  APR Energy to Supply Gas Turbine Power for Egyptian Industrial Plant
3.5  First IKEA Store in Morocco to Open in December 2015


4.1  Cycle Path Network Planned for Greater Tel Aviv
4.2  ICL Haifa (F&C) Licenses Wastewater Technology from MIGAL
4.3  World Bank Approves $150 Million Project to Boost Water Efficiency in Morocco


5.1  Jordanian GDP Grows By ‘Modest’ 2% in First Quarter

♦♦Arabian Gulf

5.2  Qatar Awards $459 Million Contract to Build First Economic Zone
5.3  Saudi Arabia Borrows $4 Billion as Oil Price Reality Hits Home

♦♦North Africa

5.4  Egypt’s Annual Core, Urban Inflation Drop in June
5.5  Egypt Pays $670 Million Debt to Paris Club
5.6  Egypt Signs Energy Import Deals with Russia’s Rosneft
5.7  Unemployment Rate in Morocco up to 9.9% in 2014


6.1  Turkish GDP Growth Seen At 2-2.5% in 2015, Missing Government Target
6.2  Greeks Defy Europe with Overwhelming ‘No’ Vote
6.3  Greece Accedes to Creditors’ Demands to Cling to Euro



7.1  Tisha B’Av to Be Observed on 25/26 July
7.2  Eid al Fitr Celebrated on 17 – 19 July
7.3  UNESCO Declares Beit Shearim a World Heritage Site
7.4  For First Time, IDF to Cater to Vegans


7.5  Kuwait Enacts Law to Make DNA Testing Mandatory
7.6  UAE Set To Launch More Braille Currency Notes
7.7  Egypt President Signs Election Law, Paving Way for Vote Date
7.8  Libyan Parties Reach Peace Deal Without Tripoli Government
7.9  Morocco Back to Daylight Saving Time on Sunday
7.10  Turkish PM Begins Coalition Talks


8.1  A.B. Dental Devices Partners with the Largest Chinese Network of Dental Clinics
8.2  MST Raises Investment for Market Expansion
8.3  Teva Launches Generic Aggrenox Capsules in the United States
8.4  New Kamada Patent for Inhaled AAT & eFlow Nebulizer System in Israel
8.5  OrthoSpace Enrolls First Patients in US IDE Study
8.6  The Israel Cancer Research Fund Earns 4-Star Rating from Charity Navigator
8.7  Sinopharm Capital-Hefei to Invest $50,000,000 in Oramed
8.8  Maccabi & Cleveland Clinic to Set Up Startup Accelerator
8.9  Teva First to Launch Generic Axert Tablets in the US
8.10  Israeli Bumblebees Fly ‘First-Class’ To Japan
8.11  Adama Secures Israeli Approval for a Novel & Proprietary Nematicide
8.12  Grasshoppers Could Be Answer To Food Crisis, Israeli Start-Up Says


9.1  Waterfall Security Increases Cyber Protection at Taiwan Project
9.2  EverCompliant Enhances its Transaction Laundering Detection Capabilities


10.1  First Half Car Deliveries in Israel Hit New Peak


11.1  ISRAEL: Spending on Private Health Services Among Highest in OECD
11.2  ISRAEL: IVC – Meitar Exits Report – H1/15
11.3  EGYPT: Egypt’s Power Supply Gets an Encouraging Boost
11.4  GREECE: Fitch Says Deal May Help Sovereign Liquidity; Big Risks Remain


1.1  Bank of Israel Concerned About Household Credit

After having published instructions to increase provision and improve transparency to customers, the Bank of Israel is going on to deal with the sharp increase in household credit, this time through more extensive reporting to the central bank.  The Bank of Israel Banking Supervision Department issued an order in the past few days instructing the banks that starting in June 2016; they will have to submit a detailed quarterly report on their credit risk in the household sector according to the borrowers’ level of risk.

In the framework of the report, the banks will have to deliver a quarterly report within a week of the publication of their financing reports listing the extent of their exposure to private individuals.  The report will include the volume of exposure according to the type of borrower.  The borrowers will be divided into five groups according to their financial strength, composed of their income and financial assets.  For example, group A will include accounts with less than NIS 5,000 in monthly income and less than NIS 10,000 in financial assets, while group E will include accounts with income of over NIS 20,000 and more than NIS 500,000 in financial assets.

The banks will have to report a series of more than 20 figures for each of these groups, including how many accounts are in excess of the overdraft limit, how many loans there are for the purchase of a car for which the car has been encumbered (in view of the increase in these loans), the volume of accounts without no regular income, how much credit is more than 90 days in arrears, and how many unused current account lines of credit there are.  (Globes 13.07)

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1.2  Israeli Private Power Producers Receive Licenses

On 14 July, Minister of National Infrastructure, Energy, and Water Steinitz signed three 20 year licenses for supplying electricity for private electricity producers Mashav Initiating & Development, Dorad Energy and Dalia Power Energies.  In addition to selling electricity to Israel Electric Corporation (IEC), these licenses also entitle the owners of the private power stations to sell electricity to large electricity producers, both industrial and commercial.  The licenses became valid with the minister’s signature, after they were approved yesterday by the Public Utilities Authority (Electricity) plenum.

The licenses bring the direct sale capacity for private consumers to over 2,300 MW.  Additional supply licenses are expected to be granted to private electricity producers, such as Ramat Negev Energy and Edeltech Ashdod, Zomet Energy and Etgal Energy which will begin producing electricity in the coming years.

Steinitz decided that with the new licenses, the companies will be able to compete with each other for the supply of up to 33% of all private electricity.  This will ensure competition between at least the three largest producers, in addition to IEC.  This measure is designed to prevent a single producer from attaining too large a share of the total deals for the sale of electricity to industrial companies in the market, which would create over-concentration and have a negative impact on future competition in this sector.  The purpose of the rules established in the licenses is to institute regulations for preventing damage to consumers in the coming years as a result of growth and development in the private electricity production and supply market.  (Globes 13.07)

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1.3  Finance Ministry Advocates 3% Across-The-Board Budget Cut

Talks are taking place between the Ministry of Finance and Deputy Minister of Health Litzman in an effort to solve the coalition crisis concerning approval of the budget.  Ministry of Finance representatives met with members of United Torah Judaism in order to obtain agreements that will make approval of the 2015-2016 state budget possible.  A compromise proposal for spreading the budget allocations over two years was put on the table, but United Torah Judaism rejected it.  The Ministry of Finance believes that United Torah Judaism will eventually compromise.

United Torah Judaism’s demands total NIS 4 billion, including a retroactive increase in child allowances and the restoration of the budget for yeshivas canceled by the previous government.  In addition to the cuts in the coalition agreements, the Ministry of Finance is also planning to institute a 3% across-the-board cut in ministerial budgets, but some ministries may be exempted from this formula.

Prime Minister Netanyahu convened the representatives of the coalition parties in order to attempt to reach a compromise requiring all the party leaders to accept a cut in the budgets promised them in the framework of the coalition agreements.  During the cabinet meeting, Netanyahu hinted that the parties would have to contribute their share to paying for the budget, saying, “We have severe problem with the budget. I expect the parties to help.”

For its part, despite the Minister of Finance’s plan to cut back the money allotted in the coalition agreements, Kulanu, his party, is insisting that the items signed with it be honored, including a pay hike for soldiers, higher senior citizens allowances, and unemployment compensation for the self-employed.  (Globes 12.07)

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1.4  Israel & China Add $500 Million to Financial Protocols

On 9 July, Ministry of Finance accountant general Michal Abadi-Boiangiu signed a $500 million extension of the financial protocols between Israel and China with Chinese Deputy Minister of Finance Yaobin Shi.  The extension of the financial protocols will make it possible to increase exports to China and to spread government support among various industrial sectors in Israel.  At the same time, under the financial protocol, the Chinese government has guaranteed to the Israeli government that credit will be repaid.

The financial protocol is an agreement between the Israeli and Chinese governments establishing the infrastructure for implementation of deals for exports from Israel to China.  Through the protocol, Israeli banks finance long-term credit for Chinese industrialists purchasing equipment from Israeli exporters. Insurance for the deal is provided by the Ministry of Finance accountant general department through Ashra Israel Export Insurance Corp.

The current extension will bring the financial protocol with China to a cumulative total of $2.6 billion, starting in 1995, up until the present time.  Most of the deals are in health, in other words the sale of medical equipment and the construction and renovation of hospitals.  There are also deals in education, transportation, communications, infrastructure, and agriculture.  (Globes 09.07)

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2.1  American Water Awarded Contract from BIRD Foundation

Voorhees, N.J.’s American Water, the US’ largest publicly traded water and wastewater utility company, is a partner to an $800,000 award to partially fund a $2 million, 2-year project, along with Tel Aviv’s IOSight from the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation.  The award is for the research and development of decision support systems to improve the efficiency of treatment plant operations.

This research project will develop data analysis tools within a data management and reporting framework at water and wastewater treatment plants to identify operating efficiencies and potential cost savings.  The proposed smart water management systems will develop and integrate comprehensive data management, data analysis and reporting systems covering the major processes performed in plants.  This will allow plant operators to leverage the smart water management system reports and analytics to create improved, streamlined and more efficient operations.  While focusing on single locations for water and wastewater, the research results will be useful to the larger North American water utility sector.  Areas of improved efficiency will include chemical addition, energy, and preventive maintenance.  This is the second BIRD Foundation award for American Water and the first for IOSight.

The Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation works to encourage cooperation between Israeli and American companies in the various areas of technology, and provides free assistance in locating strategic partners from both countries for developing joint products.  The BIRD Foundation supports projects without receiving any rights in the participating companies or in the project itself.  The financial assistance is repaid as royalties from sales.  The Foundation provides support of up to 50% of a project’s budget, beginning with R&D and ending with the initial stages of sales and marketing.  The Foundation shares the risk and does not demand that the investment be repaid if the project fails to reach the sales stage.  (AWK 01.07)

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2.2  Shufersal Partners Join with JDA Software to Optimize Inventory

Scottsdale, Arizona’s JDA Software Group announced that Shufersal, the leading supermarket chain in Israel, will implement JDA Category Management solutions to profitably optimize local assortments and meet the diverse needs of Israeli shoppers.  Specific solutions chosen by Shufersal include JDA Space Planning, JDA Floor Planning, JDA Planogram Generator, JDA Space Automation, JDA Assortment Optimization and JDA Intactix Knowledge Base.  The implementation will be supported by JDA’s regional partners Ewave and Athena Retail.

Established in 1958, today Shufersal is Israel’s largest retail chain, with 275 stores and over 13,000 employees.  The company has seven retail formats: Shufersal Sheli neighborhood stores, Shufersal Deal discount stores, Yesh and Yesh-Hessed discount stores, Shufersal Deal Extra heavy discount stores, Shufersal Express convenience stores and Shufersal Online, which offers home delivery.  Because Israel is a compact geographic market with a dense population, shopper needs are very diverse across not only every retail format, but also every store location.  JDA is a leading provider of end-to-end, integrated retail and supply chain planning and execution solutions for more than 4,000 customers worldwide.  (JDA 01.07)

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2.3  Intel Launches Israeli Startup Accelerator

On 6 July, Intel announced Intel Ingenuity Partner Program (Intel IPP), a new initiative for nurturing and promoting Israeli start-up companies.  Intel will provide the startups with an expert mentor on its behalf as well as access to various resources in its facilities.  Nine Israeli companies have been chosen for the Program’s first 6-months cycle.  By the end of this period, Intel says, the companies will be able to demonstrate a proof of concept or joint project or demo of their idea, consider joint marketing initiatives and generate opportunities for a business idea which will benefit the startup company as well as Intel.  The companies chosen for the program IPP partners are matched with an Intel mentor, who is chosen based on his/her expertise in the relevant technological area and serves as the single contact point between the company and Intel.  The mentor works directly with the start-up company and is responsible to securing its access to additional resources in Intel and in the broader relevant industry.

Intel Israel already collaborates with Israeli companies in a range of ways, including through Intel Capital and through Challenge-Up!, an acceleration program executed jointly by Intel, Deutsche Telecom and Cisco, which helps young start-up companies from Israel which develop solutions in relevant areas to reach the market faster with consulting, networking, joint projects and allocation of resources.  MAGNET, a program of the Chief Scientist of Israel, provides Israeli companies that collaborate with Intel with funding of up to 50% of their approved budget, which is then matched by Intel.  (Globes 06.07)

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2.4  Israeli Desalination Firm Named one of World’s Smartest Companies

IDE Technologies, an Israeli water desalination company, has been named by the MIT Technology Review as one of the world’s 50 smartest companies for 2015.  IDE was ranked 18th on the annual MIT Technology Review list. Topping the list was Tesla Motors.  Rounding out the top five were Xiaomi, Illumina, Alibaba and Counsyl.  Regarding IDE, the MIT Technology Review said the company was “offering more affordable water desalination at a scale never before achieved.”  (Israel Hayom 07.07)

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2.5  Israel’s StageOne Ventures Closes $65 Million Second Fund

Israeli venture capital fund StageOne Ventures has announced the closing of its $65 million StageOne II fund.  The Herzliya-based fund, which invests in early-stage enterprise software and communications technology startups hopes to repeat the success of its first fund.  The $46 million StageOne I fund had six successful exits and boasted handsome returns to its investor base.  These successes included Guardium (sold to IBM), Traffix (sold to F5 Networks), Trivnet (sold to Gemalto), Octalica (sold to Broadcom), Oversi (sold to Allott Communications) and Crescendo (sold to F5).

StageOne II will seek to make investments in such verticals where the management team believes ample opportunity abounds in the Israeli technology ecosystem such as enterprise software, big data, cloud, security, mobile, storage, fintech and IoT.  The fund has made four investments to-date in Avanan, SafeDK, Capitalise and Minerva Labs.  The fund’s base of limited partners includes past investors, multinational financial institutions, leading insurance conglomerates, notable family offices, fund of funds and sophisticated private investors, all from North America, Asia Pacific, Israel and South Africa.  (Globes 07.07)

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2.6  SafeBreach Raises $4 Million

Tel Aviv’s SafeBreach has raised $4 million from Sequoia Capital and serial entrepreneur and angel Shlomo Kramer.  The investment is the first for SafeBreach, which plans to use the money from the financing round to expand its development in Israel and its North American business.  Founded in 2014, SafeBreach generates war games simulations within the organization’s information systems, analyzes the effect of the attacks and the effectiveness of the defense products at any given moment, and enables the organization to realize what risks it faces, and to close loopholes against an attacker trying to cause real damage.  The company has developed an especially innovative solution for organizational security risk management.  While the market for security threats has been replete with innovation in recent years, the risk management field is relatively static. SafeBreach has therefore woken up a sleepy market, and is defining a new category.  (Globes 08.07)

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2.7  Francisco Partners Completes Acquisition of ClickSoftware

Francisco Partners, a global technology-focused private equity firm, announced it has completed its acquisition of ClickSoftware, a leading provider of automated mobile workforce management and optimization solutions for the service industry.  ClickSoftware is now officially a private company, and will continue to operate as ClickSoftware Technologies, Ltd.

Petah Tikva’s ClickSoftware is a leading provider of automated mobile workforce management and service optimization solutions for the enterprise, both for mobile and in-house resources.  As pioneers of the “Service chain optimization” and “The real-time service enterprise” concepts, our solutions provide organizations with end-to-end visibility and control of the entire service management chain by optimizing forecasting, planning, shift and task scheduling, mobility and real-time management of resource and customer communication.  (Francisco Partners 14.07)

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3.1  Sysorex Announces $2.5 Million AirPatrol Contract

Palo Alto, California’s big data software solutions and infrastructure provider Sysorex announced that its AirPatrol mobile device locationing and analytics system has been chosen as the worker locationing and asset management platform to be used in a new community under development in Qatar to house workers on the country’s infrastructure projects ahead of the nation’s hosting of the 2022 FIFA World Cup.  The total value of the contract to Sysorex is estimated at approximately $2.5 million.  The project is led by Doha, Qatar-based developer Daruna Development (Daruna).  It plans to design, build and operate a turn-key community that will include living accommodations, recreation, healthcare and retail facilities for 6,500 workers south of Doha, Qatar. Construction is slated to begin in mid-July and be ready for workers to begin moving in in February of 2016.

To assist in the running of the new community, Daruna has engaged a Sysorex partner, Networked Solutions Limited (NSL), to install and operate a state-of-the-art integrated IT based human capital management solution to keep its many operations running smoothly.  The solution includes networking the community with more than 1,000 of Sysorex’ AirPatrol sensors to provide location-based services and security as well as insight into how residents flow through the community, which facilities are most popular, and where improvements can be made.  (Sysorex 01.07)

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3.2  Dairy Queen Opens Newest Location in the United Arab Emirates

The Dairy Queen system has officially re-launched in the UAE with the opening of a DQ Grill & Chill restaurant.  The UAE is now the 26th country outside the U.S. and Canada with a DQ presence.  Bajco Gulf, LLC will open its first DQ Grill & Chill restaurant at the Al Naeem Mall, located in the emirate of Ras Al Khaimah (RAK) as part of a multi-unit development agreement.  Bajco Gulf is scheduled to develop a minimum of 20 new locations across the territory over the next five years.

American Dairy Queen Corporation (ADQ), which is headquartered in Minneapolis, Minnesota, develops, licenses and services a system of nearly 6,500 Dairy Queen stores in the United States, Canada and 26 other countries.  ADQ is part of the Berkshire Hathaway family of companies led by Warren Buffett.  (ADQ 06.07)

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3.3  Eleventh Holding & Orvito Introduce IoT Products in Saudi Arabia

Eleventh Holding, a Saudi Arabia-based holding company, focused on investing, creating and incubating growth oriented businesses, announced a partnership with Orvito, a Boston-based leading manufacturer of safety, security and automation IoT (Internet of Things) products, to deliver Residential, Hospitality and Enterprise solutions in Saudi Arabia.  Eleventh Holding partnership with Orvito is focused on accelerating the adoption of IoT in Saudi Arabia.  Orvito’s key differentiator is its scalable cloud-based Nucleo platform, and retrofittable products offering consumers and businesses as much or as little of smart solutions as they would like, drastically reducing the cost and time of installation and eliminating the need for wiring or teardowns.  (Eleventh Holding 01.07)

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3.4  APR Energy to Supply Gas Turbine Power for Egyptian Industrial Plant

Jacksonville, Florida’s APR Energy, a global leader in fast-track power solutions, signed a contract to provide a gas turbine power plant for an industrial customer in Egypt.  The project, which is for a minimum of 12 months, has an estimated value exceeding $30 million.  APR Energy’s plant will feature three GE aero-derivative mobile turbines that will run on clean-burning natural gas.  The plant is expected to begin generation by Q1/16.

APR Energy is a global leader in large-scale, fast-track power solutions, providing customers with rapid access to reliable electricity when and where they need it.  APR Energy combines state-of-the-art, fuel-efficient technology with industry-leading expertise to provide turnkey power plants that are rapidly deployed, customizable and scalable.  (APR Energy 02.07)

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3.5  First IKEA Store in Morocco to Open in December 2015

IKEA will open its first store in Morocco by the end of 2015 in the new city of Zenata, about 30 kilometers away from Casablanca.  The Swedish company, which has reportedly invested €40 million in its Morocco store, will create 1,400 jobs, including 400 direct jobs.  Second in Africa, IKEA will provide its customers a wide range of aesthetic and functional products at very affordable prices.  The Swedish company entered the Moroccan market via SYH Morocco, a subsidiary of the Kuwaiti Al Homaizi Group, which has franchise rights for IKEA and already represents the brand in Kuwait and Jordan.  The Swedish multinational group of companies that designs and sells ready-to-assemble furniture has to compete with other giants in the same field, mainly Mobilia and Kitea, which have already gained ground in the kingdom.  (MWN 13.07)

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4.1  Cycle Path Network Planned for Greater Tel Aviv

Israel’s Ministry of Transport is promoting a plan to establish a metropolitan network of cycle paths in the greater Tel Aviv region, Minister of Transport Katz announced on 14 July.  The paths will connect the city centers to the industrial zones.  In the first stage, 10 lanes with an aggregate length of 150 kilometers will be established.  The target is to complete the paving of the paths in the next four years.

The cities slated to receive bicycle paths are Tel Aviv-Jaffa, Ramat Gan, Holon, Bat Yam, Petah Tikva, Givat Shmuel, Givatayim, Azor, Ramat HaSharon, Rishon LeZion, Ra’anana, Kfar Saba, Herzliya, Ramla and Or Yehuda.  The plan is being advanced by an inter-ministerial steering committee including the Ministries of Transport, Finance, and the Interior; the local authorities in whose jurisdiction the bicycle paths will be paved; and representatives of NTA Metropolitan Mass Transit System and Ayalon Highways, which are due to carry out the project on behalf of the Ministry of Transport.

The Ministry of Transport estimates that when the metropolitan network goes into operation, 10% of all daily journeys in the greater Tel Aviv area will be by bicycle.  The Ministry of Transport’s figures show that half of all the journeys for work purposes are up to six kilometers, and that bicycles are the fastest means of transportation for these journeys.  (Globes 12.07)

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4.2  ICL Haifa (F&C) Licenses Wastewater Technology from MIGAL

ICL, a Tel Aviv based global manufacturer of products that fulfill essential needs in the agriculture, processed food and engineered materials markets, announced that its ICL Haifa subsidiary signed a license agreement with MIGAL Galilee Research Institute for the use of proprietary technology related to wastewater treatment.

Under the terms of the agreement ICL Haifa will have the right to develop, manufacture and sell reagents developed by MIGAL to treat wastewater.  The agreement between the parties follows the successful completion of a year-long pilot program conducted by MIGAL in conjunction with ICL’s open innovation arm, ICL Innovation, to develop a method and unique component to help lower pollution levels of wastewater so that the water may be reused for irrigation.  The technology will be deployed in agricultural products manufactured by ICL Haifa for its existing and future customers.

Kiryat Shmoneh’s MIGAL is an internationally recognized center for agro-innovation and metabolic engineering with expertise in plant-based platforms, wastewater treatment technologies, as well as clinical nutrition, precision agriculture, therapeutic molecules, chemical extractions, vaccine technologies and computational chemistry. MIGAL conducts interdisciplinary applied research that combines expertise in agro-technology, computer science and big data analysis, metabolic engineering, environmental and plant sciences, chemistry, biochemistry and microbiology.

Kiryat Ata’s ICL Innovation was established in 2014 to accelerate ICL’s development of sustainable new products and processes, as well as to provide solutions for major global challenges, by benefiting from the full range of knowledge, creativity and initiative available throughout the world.  (ICL 06.07)

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4.3  World Bank Approves $150 Million Project to Boost Water Efficiency in Morocco

The Board of Executive Directors of the World Bank (WB) approved a project worth 150 million dollars aiming at improving water efficiency in the field of agriculture in Morocco.  The WB said that The Large Scale Irrigation Modernization Project is designed to bolster Morocco’s agricultural development, a sector that generates 40% of jobs nationwide.  The project is also aimed at promoting the effective management of water and to help about 9300 farmers have sustainable access to the water needed for higher value agricultural production.  In this respect, the project will support the achievements of the goals set in the national program for the management and efficiency of water used for irrigation (known by its French acronym, PNEEI).  (MAP 09.07)

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5.1  Jordanian GDP Grows By ‘Modest’ 2% in First Quarter

Jordan’s gross domestic product (GDP) grew by 2% at the fixed market prices in the Q1/15, compared to Q1/14, according to the Department of Statistics (DoS).  Most sectors recorded growth, with the extractive industries sector achieving the highest growth rate of 10.1%.  The agriculture sector came second with a growth rate of 7.7%, followed by the private services sector (6.3%), the financial, insurance, real estate and business services sector (3.7%) and the social and personal services sector, which recorded 3%.  Although the contribution of the construction sector reached 6.5% during last year’s first quarter, it registered a negative growth by 3.4% over the same period this year.  Experts and economists said the “modest” growth does not rise up to the projections of the IMF for Jordan’s GDP to increase to about 3.5% in 2015.  (DoS 07.07)

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►►Arabian Gulf

5.2  Qatar Awards $459 Million Contract to Build First Economic Zone

State-owned Manateq has awarded a $459 million contract for the development of Qatar’s first economic zone, which will focus on logistics and advanced technologies.  A consortium formed by Spain’s Sacyr and Qatari firm Urbacon Trading & Contracting (UCC) has been hired to design and construct QEZ-1 in Ras Bufontas.  Manateq develops and operates specialized economic zones in Qatar, with the aim of providing infrastructure to help the development of private sector business, according to its website.

The Ras Bufontas project, near the new Hamad International Airport, will specialize in companies in the communications, infotech, energy, logistics, construction, transportation and other sectors, it was reported at the time of the launch.  Late last year, Qatar launched the first of three new special economic zones established to help the state diversify its economy.  Qatar has stated it wants to diversify from a hydro-carbon-led economy – which helped to make it one of the richest in the world but is subject to volatile global oil prices – to a knowledge-based economy.  The other two zones are Abu Nakhla and Um Alhoul.  (AB 13.07)

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5.3  Saudi Arabia Borrows $4 Billion as Oil Price Reality Hits Home

Saudi Arabia has borrowed $4b from local markets in the past year, selling its first bonds for eight years as part of efforts to sustain high levels of public spending as oil prices slump.  Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency (SAMA), said the government would use a combination of bonds and reserves to maintain spending and cover a deficit that would be larger than expected.

Analysts have estimated a deficit of about $130b this year.  The government, which had not tapped bond markets since 2007, has been dipping into its large foreign reserves, which peaked at $737b last August, to sustain spending on wages, special projects and the Saudi-led air war on Yemen.  It has drawn down $65b since oil prices fell.  Bonus payouts for state employees and the military made by the new king, Salman bin Abdulaziz Al Saud, have placed further pressure on state coffers.

Saudi Arabia needs an oil price of $105 a barrel to meet planned spending requirements, but the average price for the year is estimated at $58 a barrel, he said.  The issuance of domestic bonds should ease the rate of drawdown on SAMA’s overseas assets, which declined to $672b in May.  The domestic bond program marks a shift in strategy as the sustained slump in oil prices takes its toll on Saudi finances.  (FT 14.07)

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►►North Africa

5.4  Egypt’s Annual Core, Urban Inflation Drop in June

Egypt’s annual urban consumer inflation and core inflation dropped in June after rising last month, with analysts saying the fall reflected slower growth in food prices.  Urban consumer inflation dropped to 11.4% from 13.1% in May, CAPMAS said on 9 July, but it has still not returned to levels prevailing before subsidies were cut last summer.  Core annual inflation, which excludes volatile items like fruit and vegetables, dropped slightly to 8.07% from 8.14% the previous month, the central bank said.

Inflation accelerated in Egypt after the government slashed subsidies in July 2014, pushing up fuel prices as much as 78%.  Price pressures eased at the end of last year but then picked back up.  The central bank kept its benchmark interest rates unchanged last month, but had surprised analysts in January with a 50 basis point cut.  (CAPMAS 09.07)

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5.5  Egypt Pays $670 Million Debt to Paris Club

Egypt paid back $670 million of debt to the Paris Club of creditor countries this month, Egypt’s central bank said on 7 July, further reducing debts exacerbated by years of political turmoil.  The latest payment would have further shrunk Egypt’s total foreign debt, which dropped to $39.9 billion in the third quarter ending in March from $45.29 billion the previous fiscal year.

Years of political turmoil following a 2011 uprising has shattered Egypt’s economy and hurt state finances, leading to delays in some debt payments including those owed to oil and gas companies.  The Paris Club is comprised of 19 creditors selected by the IMF and is aimed at finding coordinated and sustainable solutions to the payment difficulties experienced by debtor countries.

Central bank statistics showed that Egypt’s debts to the Paris Club countries dropped 18% year-on-year in the third quarter, reaching $3.03 billion.  This month’s payment would have reduced that figure further.  Egypt’s domestic debt surpassed 2 trillion Egyptian pounds ($255.59 billion) at the end of the third quarter as the state taps local sources to finance its budget deficit.  (CBE 07.07)

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5.6  Egypt Signs Energy Import Deals With Russia’s Rosneft

Egypt and Russia’s top oil producer Rosneft have signed two initial deals for the supply of petroleum products and liquefied natural gas to Cairo.  Egypt’s oil ministry said the deals include the supply of benzene and bitumen, as well as 24 LNG cargoes for state gas company EGAS over two years starting from Q4/15.  The deals will allow Rosneft to access the Egyptian gas market and deepen broader cooperation between the two companies.  In addition, the cooperation with EGAS will allow Rosneft to strengthen its position in the global LNG trading market.  Rosneft does not produce its own LNG yet but plans to launch production jointly with ExxonMobil after 2018.

Under the terms of the agreements, Rosneft also plans to supply Egypt, the most populous Arab country, with liquefied petroleum gas (LPG), a step Rosneft said it hoped would lead to more deals to supply LPG to North Africa.  (Reuters 07.07)

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5.7  Unemployment Rate in Morocco up to 9.9% in 2014

The unemployment rate posted its third consecutive rise, standing at 9.9% in 2014 versus 9.2% in 2013 despite the drop of 0.3 points in the activity rate, according to a report by Bank Al Maghrib (Morocco’s central bank).  This increase occurred in a context marked by the slow recovery of non-agricultural activities and an average crop year, said the bank’s annual report on the economic and financial situation in 2014.  The deteriorating situation of the labor market was more conspicuous in urban areas and particularly among young people aged 15 to 24, of whom nearly four out of ten are jobless, said the bank, attributing these results to a net creation of 21,000 jobs, the lowest in the last fourteen years after the 1,000 jobs registered in 2012.  The industry sector lost 37,000 jobs, the most important since 2009, while the construction and civil engineering industry stagnated after two years of significant drops, it said.  (MAP 04.07)

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6.1  Turkish GDP Growth Seen At 2-2.5% in 2015, Missing Government Target

The Turkish economy is expected to expand between 2 and 2.5% this year, falling far short of a government target of 4%, after a June election failed to produce a single-party government.  The heightened political uncertainty, including the possibility Turkey will fail to form a coalition government and instead hold a snap election, is suppressing investment.  The euro zone crisis, as well as violence across Turkey’s borders in Syria and Iraq, was also hampering investment.  Domestic consumption has been restrained due to politics, as Turkey held three elections – regional, presidential and parliamentary – since March 2014.  Gross domestic product (GDP) grew 2.3% in the first quarter, according to the Turkish Statistical Institute.  Turkey’s medium-term plan outlined a target of 4%.

Depending on the result of coalition talks between political parties, which are due to formally start this week, GDP could still increase by 3%, while 2% is a “more pessimistic” expectation.

Turkey enjoyed rapid growth of 9.2% and 8.8% in 2010 and 2011, but it slowed sharply to 2.9% in 2014, which economists have blamed on a lack of structural reforms to add more value to production, as well as stresses in the country’s main export markets of Europe and the Middle East.  Falling exports are likely hindering growth. The medium-term plan had targeted exports of $173 billion by year end, but Economy Minister Zeybekci said they would reach $158.5 billion.  (Reuters 06.07)

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6.2  Greeks Defy Europe With Overwhelming ‘No’ Vote

In a referendum held on 5 July, Greeks overwhelmingly rejected conditions of a rescue package from creditors, throwing the future of the country’s Eurozone membership into further doubt and deepening a standoff with lenders.  European leaders called a summit to discuss their next move after the surprisingly strong victory by the “no” camp defied opinion polls that had predicted a tight contest.

In Athens, thousands of jubilant Greeks waving flags and setting off firecrackers poured into the city’s central square as official figures showed that 61% of Greeks had rejected a deal that would have imposed more austerity measures on the already ravaged economy.  The vote left Greece in limbo, risking a banking collapse that could force it out of the euro.

Without more emergency funding from the European Central Bank, Greece’s banks would have run out of cash within days, after a week of rising desperation as banks shut and cash machines ran dry.  That might force the government to issue another currency to pay pensions and wages.  For millions of Greeks, the outcome was an angry message to creditors that Greece can no longer accept repeated rounds of austerity that, in five years, left one in four without a job and shrank the economy by a quarter.

Officials from the Greek government, which had argued that a “no” vote would strengthen its hand to secure a better deal from international creditors after months of wrangling, immediately said they would try to restart talks with European partners.  With Greece facing its worst financial crisis in recent memory, Greek Prime Minister Tsipras said Athens was returning to the negotiating table with the express goal of reopening banks, which have been shut for over a week with the imposition of capital controls.

Greece’s outspoken finance minister Yanis Varoufakis, an avowed “erratic Marxist” economist who infuriated euro zone partners with his unconventional style and hectoring lectures, resigned.  His resignation, after promising Greeks he would win a better deal within a day of their overwhelming referendum vote, suggested leftist Prime Minister Alexis Tsipras is determined to try to reach a compromise with European leaders.  (Various 07.07)

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6.3  Greece Accedes to Creditors’ Demands to Cling to Euro

Greek Prime Minister Tsipras acceded to European demands for immediate action to qualify for up to €86 billion ($95 billion) of aid Greece needs to stay in the euro.  After a six-month offensive against German-inspired austerity succeeded only in deepening his country’s economic mess and antagonizing his European counterparts, there was no face-saving compromise on offer for Tsipras at a rancorous summit that ran for more than 17 hours.

The agreement shifts the spotlight to the parliament in Athens, where lawmakers from Tsipras’s Syriza party mutinied when he sought their endorsement ago for spending cuts, pension savings and tax increases.  They have until 15 July to pass into law key creditor demands, including streamlining value-added taxes, broadening the tax base to increase revenue and curbing pension costs.

While the summit agreement averted a worst-case outcome for Greece, it only established the basis for negotiations on an aid package, which would also include €25 billion to recapitalize its weakened financial system.  With Greece running out of money and its banks shut the past two weeks, the summit was billed as its last chance to stay in the euro.  Greece has been in financial limbo since the government missed a payment to the IMF and allowed its second rescue package to lapse on 30 June.  (Bloomberg 13.07)

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7.1  Tisha B’Av to Be Observed on 25/26 July

Tisha B’Av will be observed this year from night fall on 25 July until the evening of 26 July.  Tisha B’Av (or the Ninth of Av) is an annual fast day in Judaism, named for the ninth day (tisha) of the month of Av in the Hebrew calendar.  Tisha B’Av is the culmination of a three week period of increasing mourning, beginning with the fast of the 17th of Tammuz.  The fast commemorates the destruction of both the First Temple and Second Temple in Judaism’s holiest site, Jerusalem, which occurred about 656 years apart, but on the same Hebrew calendar date.   Accordingly, the day has been called the “saddest day in Jewish history”.  While the day recalls general tragedies which have befallen the Jewish people over the ages, the day focuses on commemoration of five events: the destruction of the two ancient Temples in Jerusalem, the sin of the ten spies sent by Moses, who spoke disparagingly about the Land of Israel, the razing of Jerusalem following the siege of Jerusalem in 70 CE and the failure of Bar Kokhba’s revolt against the Roman Empire.

The fast lasts about 25 hours, beginning at sunset on the eve of Tisha B’Av and ending at nightfall the next day.  In addition to the prohibitions against eating or drinking, observant Jews also observe prohibitions against washing or bathing, applying creams or oils, wearing leather shoes, or having marital relations.  In addition, mourning customs similar to those applicable to the shiva period immediately following the death of a close relative are traditionally followed for at least part of the day, including sitting on low stools, refraining from work and not greeting others.  The Book of Lamentations (Eicha) is traditionally read, followed by the kinnot, a series of liturgical lamentations.  This year, when the ninth of Av falls on Saturday, the observance is deferred to Saturday night and Sunday.

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7.2  Eid al Fitr Celebrated on 17 – 19 July

The first day of Eid Al Fitr in most countries will fall on 17 July.  The absolute determination of the sighting of the crescent moon will set the exact date.  Eid Al-Fitr, which marks the end of the holy month of Ramadan, starts on the first day of the month of Shawwal.  The three day festival marks the end of Ramadan, the month of fasting.  This festival is a time of gift giving and of giving alms.  The fasting of Ramadan is meant to remind people what life is like for their less fortunate brethren and the alms giving at Eid (known as Zakat-el-Fitr) is a continuation along the same idea.  Both fasting and the giving of alms are two of the five pillars of the Islamic faith.  Ramadan is a holy month in which drinking, smoking and eating is prohibited.  Fasting is forbidden on Eid el-Fitr and Moslems are encouraged to rise early and partake of some dates or a light, sweet snack, significant because for the past 30 days they have abstained from all food and drink from dawn till dusk.  Muslims are encouraged to dress in their best clothes, new if possible, and to attend a special Eid prayer that is performed in congregation at mosques.  Before the prayer the congregation recites the takbiir: the Eid prayer is followed by a sermon and then a prayer asking for forgiveness, mercy and help for the plight of Muslims across the world.  It is then customary to embrace the persons sitting on either side of you as well as your relatives, friends and acquaintances.  Children are normally given gifts or money.  Women (particularly mothers, wives, sisters and daughters) are normally given special gifts by their loved ones.

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7.3  UNESCO Declares Beit Shearim a World Heritage Site

The Beit Shearim National Park in northern Israel has been officially named a UNESCO World Heritage Site.  The approval marks a successful end to a campaign that began in 2002, when Israel first proposed the ancient necropolis for World Heritage status.  The vote took place at the 39th UNESCO World Heritage Conference in Germany, with 17 of the organization’s 21 member nations voting in favor. Supporters of World Heritage status for Beit Shearim included India, Turkey and Senegal.

Located some 20 kilometers (12 miles) east of Haifa in the Lower Galilee, Beit Shearim dates back to the first century BCE and was destroyed by fire in 352 C.E.  Known as “the Mount of Olives for the ancient Jewish world,” the necropolis contains a network of more than 30 burial caves, one of which holds the grave of Rabbi Yehuda Hanassi.  The city had a second life during the Byzantine era.  In addition to the ancient archaeological remains, the site is home to sculptor David Polus’ bronze statue of Alexander Zaid, one of the founders of the Mandate-era Jewish defense organization Hashomer, and offers a number of hiking trails.  (Israel Hayom 07.07)

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7.4  For First Time, IDF to Cater to Vegans

The Israel Defense Forces announced 7 July that it will now provide soldiers with new culinary options to cater to vegan soldiers’ dietary needs.  To date, military mess halls on bases nationwide have offered only special vegetarian menus for lunch and vegan soldiers received a special allowance to purchase vegan foods.  The growing number of vegan soldiers, however, has prompted the military to increase its offerings of vegan-friendly foods, which will be introduced in full from 15 July.  At the same time, the special food allowance given to most vegan soldiers for lunch will be rescinded.  The allowance for vegan soldiers serving on closed bases, which provide three meals a day, will be revised to cover breakfast and dinner.  The IDF also plans to distribute pre-packaged vegan breakfast boxes, offering assorted cereals, tahini, almonds, nuts, dried fruits, soy products, etc..  (Israel Hayom 08.07)

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7.5  Kuwait Enacts Law to Make DNA Testing Mandatory

Kuwait has passed a law that will force its citizens and residents to give DNA samples.  The move is part of the country’s response to the ISIL bomb attack on Kuwait City’s Imam Al Sadeq mosque, which killed 27 people.  The law aims to create a comprehensive DNA database of the 1.9 million Kuwaitis and 2.9 million expats in the country, which will be used to track criminals and terrorists.  Anyone who refuses to give a sample will face a year in jail and a fine of $33,000.  Anyone who provides a fake sample will face a seven-year jail sentence.  The government also approved a $400 million emergency funding for the interior ministry, which oversees the security forces.  (AB 05.07)

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7.6  UAE Set To Launch More Braille Currency Notes

The UAE Central Bank has announced that it will put into circulation two more currency notes specially produced for the blind and sight-impaired.  It said it would launch currency notes of AED500 and AED5 denominations to follow up the introduction of AED100 and AED50 notes in March.  The banknotes will include new tactile features engraved in bleed-off intaglio printing on the edge of the banknotes’ short sides.  The tactile feature for AED500 denomination consists of a pair of three horizontal lines, separated by a recognizable distance, around the middle of the right and left short sides of the note.  The AED5 denomination will consist of a horizontal line in the middle of the right and left short sides of the note.  The overall design and other specifications of the two notes are the same as in the currency notes currently in circulation.  (WAM 08.07)

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7.7  Egypt President Signs Election Law, Paving Way for Vote Date

Egypt’s President al-Sisi has endorsed an amended law defining voting districts in this country of more than 50 million voters, removing the last hurdle for setting the date for the long-delayed parliamentary elections.  Egypt has not had an elected legislature since 2012, when the country’s Supreme Court ruled that the parliament’s lower chamber was not constitutionally elected.  An earlier version of the law was declared unconstitutional by the same court in March, causing an indefinite delay in parliamentary elections.  The court at the time said the law failed to guarantee equal representation for voters, and asked that it be amended.

Al-Sisi’s spokesman said the amended law divides Egypt into 205 districts for individual candidates and four districts for party lists.  According to the law, the next elected lower chamber will have over 560 elected lawmakers, with only 20% of them voted in on the basis of a party-list system.  Egypt’s upcoming parliament elections are the third and final step in a roadmap announced by al-Sisi in 2013, when he ousted Islamist President Morsi amid massive protests against Morsi’s yearlong rule.  (Reuters 10.07)

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7.8  Libyan Parties Reach Peace Deal Without Tripoli Government

Libyan political leaders reached a new version of a U.N.-brokered peace deal on 11 July, putting pressure on the Tripoli leadership to sign on and build a unity government in hopes of ending the country’s chaos.  The Tripoli government took part in earlier stages of talks but refused to participate in the latest discussions in the Moroccan city of Skhirat.  Members of Libya’s internationally recognized parliament and local and regional leaders initialed the agreement.

Libya has been split for nearly a year between an elected parliament in the country’s far east and an Islamist-led government backed by militias that seized the capital.  Lacking central authority, the country has seen mounting extremist activity, including by the Islamic State group and al-Qaida-linked militants, and become a haven for migrant trafficking.  (AP 11.07)

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7.9  Morocco Back to Daylight Saving Time on Sunday

Morocco will put forward the clock one hour (GMT+1) on Sunday, 19 July at 02:00h, the Civil Service and Administration Modernization Ministry announced.  Daylight saving time had been implemented since early April, but Moroccan authorities decided to go back to Morocco’s standard time GMT on 14 June, a few days before the beginning of Ramadan.  But the decision to switch to daylight saving time in the spring, switch back to standard time just before Ramadan, and again back to daylight saving time after Ramadan ends is not accepted by many Moroccans who view the decision as harmful to their wellbeing.  Last March, a group of Moroccans launched an online petition calling on the government to recant its decision to adopt daylight saving time.  The online petition argued that the decision has a negative impact on their health, it increases the risks of heart attack and causes sleeping disorders.  (MWN 14.07)

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7.10  Turkish PM Begins Coalition Talks

Turkish Prime Minister Ahmet Davutoglu vowed a quick start to coalition talks on 9 July, after President Erdogan instructed him to form a new government more than a month after an election deprived their AK Party of a parliamentary majority.  Opposition lawmakers had accused Erdogan of deliberately delaying the process to push for a snap election he hopes might see the AKP regain a majority.  Erdogan gave Davutoglu the mandate to form a new government during a meeting in his palace in Ankara, the presidency said.  Political parties now have 45 days to form a new government or face the prospect of a re-run.

The 7 June vote left the AKP unable to rule alone for the first time in over a decade, plunging Turkey into political uncertainty not seen since the 1990s and thwarting, for now, Erdogan’s ambition to amass greater power.  It is unclear whether the Islamist-rooted AKP is leaning toward forming a coalition with the rightist Nationalist Movement Party (MHP) or the main opposition left-leaning Republican People’s Party (CHP).  (Various 09.07)

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8.1  A.B. Dental Devices Partners with the Largest Chinese Network of Dental Clinics

Ashdod’s implant company A.B. Dental signed a triple partnership agreement to distribute dental implants and provide training courses in China, Hong Kong and Macau.  The agreement was signed with the Bybo Dental Group, China’s largest network of clinics; Chinese company Dolphins International Dental Academy; and the Sino Integrity Company from Hong Kong.  The companies will invest millions of dollars in a joint venture to distribute A.B. Dental products such as – dental implants, prosthetics for oral rehabilitation, and imaging services, to the sum of tens of millions of dollars in the coming years.

This agreement was made simultaneously as A.B. Dental launched its customized implant.  The customized implant was introduced only following a three years thorough research by Professor Schwartz, supported by Israel’s Chief Scientist.  In this research, the advantages of the unique surface area of this implant were scientifically proven, having specially high Hydrofoil dimensions made using Nano Technology.  This research was proven through In-Vitro lab tests, through In-Vivo animal research and up to clinical tests on humans, in accordance with the Helsinki Committee procedures.  A.B. Dental’s customized implant is intended for complex medical conditions, tumors, partial or full jaw reconstructions, and more.  The implant is made of titanium powder and printed in the Laser Syntering method by a special 3D printer and implant design software using the ABGUIDESERVICE.  (A.B. Dental 01.07)

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8.2  MST Raises Investment for Market Expansion

MST – Medical Surgery Technologies announced the closing of its Series C investment round.  The $12.5 million investment was led by Haisco Pharmaceutical Group, a leading Chinese pharmaceutical manufacturer, and was joined by existing MST investors: Triventures, SCP Vitalife Partners, Agate MaC Medical Investments, OurCrowd and Jacobs Investment Company.

MST markets the FDA-cleared and CE-approved AutoLap, the only image-guided laparoscope positioning system targeting the multi-billion dollar minimally invasive surgery market.  Based on MST’s proprietary image analytic technology platform, AutoLap offers surgeons full and natural control of the surgical procedure with minimal user interaction.  Healthcare providers benefit from cost-effective, cutting-edge surgical technology to perform more procedures more efficiently.  As part of the investment, Haisco will serve as exclusive distributor of AutoLap in China.

Yokneam’s MST – Medical Surgery Technologies is a privately-held company founded in 2005 with the mission of bringing image guidance technology to the surgical suite.  MST’s team includes professionals with extensive expertise in the development and commercialization of advanced medical systems integrating hardware, software and robotics.  (MST 01.07)

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8.3  Teva Launches Generic Aggrenox Capsules in the United States

Teva Pharmaceutical Industries launched generic Aggrenox (aspirin/extended-release dipyridamole) capsules in the United States.  Aspirin and extended-release dipyridamole capsules are used to lower the risk of stroke in people who have had a mini-stroke (transient ischemic attack or TIA) or stroke due to a blood clot.  The National Institutes of Health estimates 185,000 Americans are at risk of another stroke within 5 years of a previous stroke.  Teva recognizes the devastating impact of a stroke and is pleased to launch generic aspirin and extended-release dipyridamole capsules as a treatment option for at-risk stroke patients.  Being able to make affordable, high-quality generic medicines available to millions of patients every day is Teva’s commitment.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day.  Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area.  In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products.  (Teva 01.07)

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8.4  New Kamada Patent for Inhaled AAT & eFlow Nebulizer System in Israel

Kamada reported that the Israeli Patent Office (ILPO) has issued the patent titled, “System For Pulmonary Delivery Of Alpha-1 Proteinase Inhibitor” under patent number, 193318.  The patent is co-owned by Kamada and Pari Pharma, GMBH, the producers of the eFlow nebulizer system, and covers claims regarding the unique combination of Kamada’s inhaled alpha-1 proteinase inhibitor (AAT) with a customized eFlow nebulizer system.  This patent application has been approved in Europe, Russia and Australia.

Kamada’s proprietary alpha-1 antitrypsin therapy (AAT) is the first available ready-to-infuse liquid alpha1-proteinase inhibitor (Alpha1-PI) and is indicated as a chronic augmentation and maintenance therapy in adults with clinically evident emphysema due to severe congenital AAT deficiency.  It is administered intravenously once a week to augment the levels of AAT in the blood. AAT is a protein derived from human plasma with known and newly discovered therapeutic roles given its immunomodulation, anti-inflammatory, tissue-protective and antimicrobial properties.  It is approved by the U.S. FDA for the treatment of AAT deficiency and is marketed under the brand name, Glassia, through a strategic partnership with Baxalta in the United States.

Ness Tziona’s Kamada is focused on plasma-derived protein therapeutics for immunomodulation orphan indications and has a commercial product portfolio and a robust late-stage product pipeline.  The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived proteins.  (Kamada 01.07)

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8.5  OrthoSpace Enrolls First Patients in US IDE Study

OrthoSpace announced the enrollment of the first three patients in its US Investigational Device Exemption (IDE) pivotal study.  The study is a 184 patient randomized, single blinded control study that compares the Company’s InSpace biodegradable balloon system to conventional repair or partial repair for the treatment of full thickness massive rotator cuff tears.  While InSpace is currently commercially available outside of the United States and has been implanted in over 5,000 patients in 15 countries, this announcement marks the first time the balloon has been implanted in the US.  Enrollment in the study is ongoing, and patients are being recruited at multiple sites across the country.

OrthoSpace is a privately held medical device company located in Caesarea, Israel.  The Company’s product, InSpace, is an orthopedic biodegradable balloon system that is simple, safe and a minimally invasive method that addresses unmet clinical needs in rotator cuff repair.  InSpace is CE Marked and commercialized in Europe and Israel and the Company has begun a pivotal human clinical study of the system in the United States.  (OrthoSpace 06.07)

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8.6  The Israel Cancer Research Fund Earns 4-Star Rating from Charity Navigator

The Israel Cancer Research Fund (ICRF) received a 4-Star rating in July 2015 from Charity Navigator, the premier charity evaluator.  In its congratulatory letter, the company cited ICRF’s good governance and other best practices and its consistency in executing its mission in a fiscally responsible and transparent way.  The Israel Cancer Research Fund (ICRF) was founded in 1975 by a group of American and Canadian physicians, scientists and lay leaders who sought to support cancer research in Israel, a world center for cutting edge research and innovation.

Since its founding, the organization has awarded more than $55 million to fund more than 2,100 grants to Israeli cancer researchers at all of the major institutions in Israel via fellowships, project grants, career development awards and professorships.  Each grant application undergoes a rigorous review process by a Scientific Review Panel that is modeled after the National Institutes of Health and is composed of prominent American and Canadian scientists.  The work of Israeli cancer researchers has resulted in some of the most significant cancer breakthroughs in recent years.  (ICRF 07.07)

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8.7  Sinopharm Capital-Hefei to Invest $50,000,000 in Oramed

Oramed Pharmaceuticals signed a non-binding Letter of Intent (LoI) for an investment and license agreement in China with Sinopharm Capital Management and Hefei Life Science & Technology Park Investments and Development Co. (Sinopharm/Hefei) potentially valued at $50,000,000 plus royalty payments.  Oramed will receive $500,000 in exchange for exclusively negotiating with Sinopharm/Hefei for 60 days, while the final terms of the agreement are negotiated and finalized.  The transaction which additionally includes 10% royalties on sales, will allow Sinopharm/Hefei to purchase a roughly 10% stake in Oramed Pharmaceuticals and acquire rights for oral insulin in China.

Jerusalem’s Oramed Pharmaceuticals is a technology pioneer in the field of oral delivery solutions for drugs currently delivered via injection.  Established in 2006, Oramed’s Protein Oral Delivery (POD[TM]) technology is based on over 30 years of research by top scientists at Jerusalem’s Hadassah Medical Center.  Oramed is seeking to revolutionize the treatment of diabetes through its proprietary flagship product, an orally ingestible insulin capsule (ORMD-0801).  (Oramed 07.07)

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8.8  Maccabi & Cleveland Clinic to Set Up Startup Accelerator

Cleveland Clinic announced an agreement with Maccabi Health Services for the establishment of an accelerator for Israel digital health companies.  The venture will be called eHealth Ventures.  Companies in the accelerator will receive guidance and consultation, access to specialists and business partners in the two entities, and initial financing from the accelerator.  The budget for the venture was not announced, but it is believed that the two entities, together with other investors, are planning to allocate tens of millions of dollars to the projects for initial investments and follow-on investments.  Cleveland Clinic said that the accelerator was designed for companies wishing to move some their business to the US at a later stage.  Maccabi has also been recently operating through its commercial company in cooperation with startups like Medial Research in the intestinal sphere and LabStyle Innovations Corporation (Dario) in the diabetes field.  Cleveland Clinic operates a number of innovation programs, and has been in close contact with Israel for several years through various programs for supporting innovation, from grants to direct investments.  (Globes 08.07)

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8.9  Teva First to Launch Generic Axert Tablets in the US

Teva Pharmaceutical Industries launched generic Axert (almotriptan malate) tablets, 6.25 mg and 12.5 mg, in the United States.  Teva was the first applicant to submit an Abbreviated New Drug Application (ANDA) for almotriptan malate tablets containing a Paragraph IV patent certification.  The ANDA for almotriptan malate tablets submitted by Teva to the US FDA in December 2005, was the first ANDA submitted by a generic company containing a Paragraph IV certification for Janssen Pharmaceuticals Axert.  Teva is the first applicant to receive approval and will have a period of market exclusivity until the pediatric exclusivity associated with the only patent for Axert expires on 7 November 2015.

Teva continues to deliver on its generics business strategy and remains focused on increasing its first to file regulatory submissions in the United States.  With over 375 generic medicines available, Teva has the largest portfolio of safe, effective, FDA-approved generic products on the market.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day.  Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products.  (Teva 08.07)

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8.10  Israeli Bumblebees Fly ‘First-Class’ To Japan

Israeli bumblebees are being sent to Japan to help make up for a lack of bees caused by increased use of pesticides in rice fields.  The Israeli bees are being sent to Japan inside spacious hives, each of which contains an impregnated queen bee and 50 worker bees that supply her needs.  BioBee, based at Kibbutz Sde Eliyahu, which raises and ships the bees, takes care to ensure the queen and her minions have as comfortable a flight as possible with “first-class” conditions and a short layover in Moscow.  When they arrive in Japan, the bees are sent to greenhouses in farms through the country, where they work busily to pollinate the produce, a process vital to ensure a good harvest.

Bio Bee’s mass-produced earth bumblebees (Bombus terrestris) are created for pollination purposes only.  They have been bred to fulfill their mission even when the temperature drops, as well as in rainy, cloudy weather, when bees do not naturally work and prefer to huddle up in their warm hives.  As the bees suck up nectar from a flower, they shake it, which helps disseminate the pollen.  (Israel HaYom 13.07)

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8.11  Adama Secures Israeli Approval for a Novel & Proprietary Nematicide

ADAMA Agricultural Solutions, the leading global off-patent provider of crop protection solutions, has achieved Israeli regulatory approval to market NIMITZ, a novel, non-fumigant nematicide with unprecedented user safety and simplified application features.  The innovative product controls nematodes, one of the most destructive and problematic pests in agriculture worldwide.  NIMITZ, which is unique and proprietary to Adama, is the culmination of the investment of significant resources over a number of years in advanced R&D in the fields of chemistry and agriculture.  Adama recently inaugurated a new manufacturing facility in Neot Hovav in order to support the sale of NIMITZ on a worldwide basis.

NIMITZ® is expected to be a significant growth driver for Adama in the future.  It offers a highly effective and simple-to-use solution to farmers in the control of nematodes, along with a low toxicity and eco-toxicity profile compared to other alternatives currently on the market.  The product has unprecedented safety characteristics amongst chemical nematicides, and it does not harm the populations of other organisms in the soil.  The product is simple to use, and does not require the use of special protective clothing during application.  It also allows for a significantly narrower waiting period between application and planting.

Tel Aviv’s ADAMA Agricultural Solutions is the leading off-patent crop protection solutions company in the world.  The Company’s comprehensive range of high-quality, differentiated and effective herbicides, insecticides and fungicides, help farmers worldwide to increase yields by preventing or controlling weeds, insects and disease that harm their crops.  (ADAMA Agricultural 13.07)

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8.12  Grasshoppers Could Be Answer To Food Crisis, Israeli Start-Up Says

Millions of people suffer from lack of protein, which is especially dangerous for children – and with the world population set to grow significantly in the coming years, mankind needs more, and cheaper, sources of protein.  Steak TzarTzar believes it can provide a healthy, cheap alternative source of protein to the millions of children who lack other sources.  Steak TzarTzar aims to be the first to farm edible insects, using high-tech methods to quickly grow them in an organized manner, under sanitary conditions.  The company feels grasshoppers are not only healthier than most sources of protein, but also cheaper and more environmentally friendly.

Around 2.5 billion people already consume insects, and there are about 1,900 edible insect species.  Steak TzarTzar will grow different species of grasshoppers, which are “one of the most edible insects.”  The company will first focus on east Africa, where grasshoppers are considered a delicacy but are twice as expensive as cattle.  They are only available for four to six weeks of the year and need to be collected in the wild.  Grasshoppers are cheaper to farm and grow faster than cattle. The company’s goal is to provide the insects year-round at an affordable price.  Steak TzarTzar sees huge business potential in the new industry.  It plans on extracting nutrients and protein powders to sell in the Western world, and sees the 2.5 billion people who currently consume insects as a market already familiar with the product.

Steak TzarTzar currently runs a facility in northern Israel growing eight species of Israeli grasshoppers, under as sterile growing conditions as possible, monitoring the bugs for disease and keeping poisonous species away from growing areas.  The company hopes to have its first commercial farm operating by the end of 2016 and already has an agreement with the Kenyan government to set up a test farm there.  Their grasshopper varieties are kosher, based on the tradition of Jews from Yemen and elsewhere who have traditionally eaten them.  (ToI 08.07)

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9.1  Waterfall Security Increases Cyber Protection at Taiwan Project

Waterfall Security Solutions announced the installation of its stronger-than-firewalls, hardware-enforced Unidirectional Security Gateways at the Smart Grid Demonstration Project in Taiwan.  The Taiwan Power Company (Taipower) needed a secure way to provide real-time information from its power plant to the Smart Grid Demonstration Project.  Waterfall and its local partner, iSecurity Inc. (iSecurity), worked with the Industrial Technology Research Institute (ITRI) to deliver its solutions to the Smart Grid demo site in Penghu Island, Taiwan.  Waterfall’s Unidirectional Security Gateways were deployed to safely connect the power plant control system network to the Smart Grid.  The Waterfall gateway creates a real-time copy of a control system on the corporate network, so that Smart Grid operators and applications can have real-time access to the very latest information, logs, reports and other control system data. Waterfall’s Unidirectional Security Gateways bring this about without any risk of a network attack originating from the Internet.

Rosh HaAyin’s Waterfall Security Solutions is the leading provider of stronger-than-firewalls solutions for industrial control networks and critical infrastructures.  The company’s products are deployed in utilities and critical national infrastructures throughout North America, Europe, Asia and Israel.  (Waterfall 06.07)

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9.2  EverCompliant Enhances its Transaction Laundering Detection Capabilities

EverCompliant released MerchantView 3.0, the third generation of transaction laundering detection and prevention.  A transaction mule is a term used to distinguish a legitimate merchant from a merchant that is actively involved in funneling transactions from illegal or unreported origins.  Transaction laundering takes place when a merchant processes payments and/or is involved in illegal, unreported activity on behalf of or through a legitimate merchant account.  The term is used to distinguish illegal and unreported aggregation activity from the legitimate activity of reported and known aggregation.  Both these terms were introduced by EverCompliant, a couple of years ago, when they noticed a monumental shift in online fraud activity from traditional consumer fraud towards merchant base fraud.

EverCompliant actively detects an unprecedented number of transaction laundering activities on a daily basis, saving its customers hundreds of thousands of dollars or more each year by preventing acquirers and PSPs assessment fines, brand damage and the associated costs.  EverCompliant is headquartered in Tel Aviv, Israel with offices in New York City and is partnered with ControlScan, its US operations and distribution partner based out of Atlanta, Georgia.  (EverCompliant 09.07)

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10.1  First Half Car Deliveries in Israel Hit New Peak

A record 144,000 new vehicles were delivered in Israel in H1/15, a 6.2% rise in comparison with the corresponding period last year.  In June, 25,570 vehicles were delivered, 10% more than in June 2014.  A number of factors affected car deliveries in June, including large purchases by car rental companies in preparation for the summer tourist season, and aggressive sales campaigns by some importers, led by Kia and Hyundai.  These two units of South Korean manufacturer Hyundai Motor Group also completely dominated new vehicle sales in the first half of the year, taking first and second place in deliveries and an aggregate 26% market share.

Hyundai cars grabbed first place with 19,061 deliveries, representing a 4.4% increase compared with the corresponding period in 2014.  Deliveries of Kia vehicles soared 28% to 17,821, putting it in second place.  Kia’s Sportage crossover vehicle was the best-selling model in Israel for the second straight month and also the best-selling model in the quarter.  Toyota was in third place with 16,119 deliveries, a 4% rise. Mazda deliveries totaled 10,625, up 4.6%, putting it in fourth, and Mitsubishi deliveries were in fifth place with 9,184 deliveries, a 29% jump.  (Globes 02.07)

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11.1  ISRAEL:  Spending on Private Health Services Among Highest in OECD

Israel HaYom reported that Israel is one of the five developed countries where citizens pay the most money out of pocket for medical services and where private expenditure on health has increased the most over the last three years, according to a recent report issued by the Health Ministry.  The report compared health expenditures among the 34 developed countries that make up the OECD, the Organization for Economic Cooperation and Development.

The report indicates that in Israel, 39% of health services payments come from private patients.  The only countries where patients pay more are Chile (54%), the U.S. (52%), Mexico (49%) and South Korea (44%).  The average among OECD countries is only 27%.

The bulk of the expenditure in Israel is for health insurance – 82.9% of Israelis possess some form of private health insurance to complement state-provided health services, placing Israel third in the proportion of citizens who pay for private insurance.  The OECD average is 36%.

The report encompasses 40 different health parameters and for the first time includes comparative data on waiting periods for surgery.  In Israel, patients wait the least amount of time of an OECD nation for bypass surgery (12 days), but much longer for a knee replacement (130 days) or hysterectomy (57 days), both of which place Israel fifth among OECD countries.

The report also points to well-known, long-term issues facing Israel’s health system.  The number of nurses in Israel is the second lowest among the OECD countries, as is the number of hospital beds.  The number of doctors is lower than the OECD average and the number of MRI scanners (3.1 machines per 1 million people) is the third lowest – the current OECD average is 13.1 machines per 1 million people.

Regardless of the many obstacles, Israelis’ general health is relatively good.  The infant mortality rate is low and life expectancy for men (80) is among the highest and above average for women (84).  (Israel Hayom 08.07)

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11.2  ISRAEL:  IVC – Meitar Exits Report – H1/15

In the first six months of 2015, Israeli high-tech exit activity accelerated, garnering $5.29 billion in 54 deals – nearly 76% of the total proceeds from exits in all of 2014, with 107 deals totaling $6.98 billion, and 80% of $6.62 billion in 91 exits in 2013, both considered part of the few most successful years for Israeli exits.  The figures were published as part of the IVC-Meitar Exits Report H1/15.

The average deal size in H1/15 was $98 million, 51% more than the annualized average of $65 million in 2014 and 34% above $73 million in 2013.  The average VC-backed exit in H1/15 totaled $84 million, a 15% increase from the 2014 average, while non VC-backed exits jumped 80% from an average of $60 million last year to $108 million in the first half of 2015.

Dan Shamgar, partner at law firm Meitar Liquornik Geva Leshem Tal, noted, “”The first half of 2015 featured robust M&A activity across the industry, and the second half is already looking promising, with a pipeline of meaningful transactions in the works.  We are experiencing growth both in the number and variety of potential buyers showing interest in Israeli companies, and in the variety of target companies – that are more mature and ambitious.  In addition, investors in Israeli companies continue to be selective in defining the exit path and are willing to be patient in order to maximize value.  We are optimistic about H2/15.”

Almost 24% of the total exit value in H1/15 was due to the $1.25 billion acquisition of FundTech, an enterprise applications company, by multinational fintech company D+H.  Five out of the ten largest acquisitions (all greater than $100 million) were software-related.

The report revealed that M&A deals accounted for a significant part of the H1/15 increase in exits.  Proceeds from mergers & acquisitions of Israeli and Israel-related high-tech companies in H1/15 totaled $4.98 billion in 48 deals, exceeding the 2014 aggregate of $4.93 billion, partly due to the FundTech acquisition.  In terms of the number of deals, H1/15 totaled 55% of the annual average M&A deal-making in the previous five years.

The average M&A deal was the highest in six years, at $104 million, second only to 2012, when Cisco Systems acquired NDS for $5 billion.  Deals in the $100-500 million range accounted for 54% of M&A proceeds in H1/15, explaining the high average, unlike 2012 figures, when the exceptional NDS deal accounted for the increase in total proceeds.

Koby Simana, CEO of IVC Research Center said, “In the first half of 2015 we saw company valuations at exits rising significantly and quickly, with 11 deals above $100 million each, compared with 17 such deals for the full year 2014.  Such high-value deals are clear evidence of the availability of more acquisition capital, as well as of the fact that more companies and investors have been working on growing companies longer, thus providing the market with more mature potential acquisitions, which receive better, higher valuations.  On top of that,” he added, “we’ve been tracking more and more international technology companies and conglomerates from markets outside the US – particularly Asian and European corporations – who join the expanding pool of potential buyers of Israeli high-tech companies.  Such new players are bringing with them an influx of new capital and growing international interest, driving up company valuations even further,” concluded Simana.

Israeli high-tech IPO activity has continued, with six companies going public.  The direct proceeds from the IPOs were somewhat modest, at $308 million, only 6% of total exit proceeds in H1/15, compared with $2.1 billion (29% share) raised in 16 IPOs in 2014 as a whole.  Only two of the six companies that went public were venture-backed, compared with 2014, when more than half of the IPOs were by VC-backed companies.

While IPO activity to date peaked in 2014, more than 20 Israeli companies are currently planning to go public in 2015 – 2016 and three to four IPOs are scheduled to take place by the end of the year, for a total of up to $500 million.

The IVC-Meitar Exit Report also reveals that acquisition activity by Israeli high-tech companies continued in H1/15, with 24 Israeli high-tech companies closing a total of 32 acquisition deals of both local and foreign companies in order to fuel expansion efforts.

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech, venture capital and private equity industries. Its information is used by all key decision-makers, strategic and financial investors, government agencies and academic and research institutions in Israel.

Meitar Liquornik Geva Leshem Tal is Israel’s largest law firm and a leader in the technology sector.  The firm’s Technology Group numbers over 90 seasoned professionals who specialize in representing technology companies, cooperating with attorneys from complementary practice areas, such as taxation, intellectual property and labor law, and dozens of attorneys from other practice areas.  (IVC 07.07)

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11.3  EGYPT:  Egypt’s Power Supply Gets an Encouraging Boost

A $9b deal inked in Egypt will give a substantial boost to the country’s electricity generation capacity, reports the Oxford Business Group, helping the government address power shortages and support a growing population and economy.

On 3 June, German industrial conglomerate Siemens agreed a deal to supply gas and wind power plants that will add 50%, or 16.4GW, to Egypt’s national grid.

The deal, described as the single biggest order in Siemens’ 168-year history, was signed during a visit by Egypt’s President Abdel Fattah El Sisi to Germany, and follows on the back of memorandums of understanding (MoU) signed in March at the Egypt Economic Development Conference in Sharm El Sheikh.  It includes the supply of 24 H-Class gas turbines for power plants that are scheduled to come on-stream in phases, starting in the summer of 2017.

Two of the plants, worth €1.6b ($1.8b), are to be constructed by a consortium of Siemens and Egypt-based conglomerate Orascom Construction, with a total generation capacity of 9.6 GW.

In line with efforts by the government to increase renewable contributions to the energy supply to 20% of the total, the Siemens deal also includes around 600 wind turbines for 12 wind farms in the Gulf of Suez in the northern Red Sea.  The farms are expected to have a total installed capacity of 2 GW.

New Capacity

In the meantime, Egypt is already bringing new capacity on-stream to address what has become a perennial supply-demand mismatch as the country enters the hottest part of summer.  In mid-May, the government opened a 750 MW combined-cycle gas turbine power plant in the Qalyubia governorate, in the northern outskirts of Cairo, at a cost of $500m.

The government has also moved to boost supply and trim demand this year. It has reduced fuel subsidies – long a distorting factor in Egypt’s economy that has encouraged overconsumption while weighing heavily on the national budget.

Towards the end of June, a ministerial economic group approved the creation of a company that will own and manage projects with a view to adding electricity units to help meet demand.  According to the cabinet statement, the company may also be listed on the Egyptian Stock Exchange.

Despite these efforts, Egypt continues to face power shortages.  Energy consumption is rising and both a lack of fuel and inadequate generating capacity have led to load-shedding among both residential and commercial consumers.  Last year, power shortages dominated the hot summer months, affecting households and businesses across the board.  A ministry spokesperson said recently that the capacity of Egypt’s national electricity grid has reached 32,000 MW, with electricity consumption expected to reach 28,000 MW during the peak period in Ramadan.

In May, the Ministry of Electricity declared a “state of emergency” for power producers, transporters and distributors in the run-up to the summer.  Later in the month, the Egyptian Natural Gas Holding Company (EGAS) announced it had stopped pumping gas to 60% of high-consumption gas factories, including steel mills, cement factories and fertilizer plants, in order to direct resources to power stations.

Rebooting Infrastructure

Egypt is also looking to introduce a range of measures that can address the shortfall in the immediate term as well as pave the way for sustained growth in capacity over the long term, ranging from increased electricity imports to a more attractive investment framework.

Older power plants are also in the process of being overhauled. Some are operating at only 40-60% capacity due to old or faulty equipment, lack of maintenance or poor fuel quality, Naji Ibrahim Jreijiri, regional director Egypt, North and Central Africa at ABB Industries, an international power and automation technology company, told OBG.  “There is a realization by the government that it needs to reinforce the transmission and distribution networks in order to meet increased electricity demand and avoid the large-scale power cuts that plagued the country last summer,” Jreijiri told OBG.  “We need improved quality of electricity as well as more even distribution.  That’s why the government is in a hurry to implement many of the power projects.”

While attention has understandably focused on big-ticket power projects, Jreijiri highlighted the potential for localized networks, with smaller, sometimes mobile, power plants supplying clusters of villages in rural areas.  This requires less investment in the network, and the plants could be supplied almost ready-to-go, making them quicker to deliver, he said.  (OBG 30.06)

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11.4  GREECE:  Fitch Says Deal May Help Sovereign Liquidity; Big Risks Remain

Fitch Ratings said on 13 July that the agreement between Greece and other Eurozone states may ease the former’s extreme liquidity pressure and raises the possibility of a third bail-out program, but substantial near-term and long-term challenges to the sovereign’s creditworthiness remain.

The agreement follows last week’s Greek request for a three-year European Stability Mechanism (ESM) loan facility and intensive negotiations.  The Greek government has been asked to submit the overall agreement and legislation on some of its key provisions for parliamentary approval by 15 July.  This would be followed by national parliamentary approvals where needed, and the start of ESM program negotiations, potentially beginning next weekend.  Greece’s official sector creditors estimate possible program financing needs of €82 – 86b, although the agreement suggests they should “explore the possibilities to reduce the financing envelope.”

Breaking the political impasse could temporarily support sovereign liquidity if it unlocks bridge financing. Donald Tusk, President of the European Council, said finance ministers will “as a matter of urgency discuss how to help Greece meet her financial needs in the short term.”

But political and implementation risks to the deal and any subsequent ESM program remain high. Parliamentary backing for an agreement that achieves very few of the Greek negotiators’ earlier demands could be secured with centrist support.  But the Syriza-led coalition may lose its working majority, effectively resulting in something akin to a national unity government and increasing the likelihood of another election this year.

The Greek government’s acceptance of many of its creditors’ terms suggests it could secure an ESM program, but today’s deal leaves scope for disagreement.  For example, fiscal surplus targets are not specified, although they have been part of previous proposals.

Even if an ESM program were established, there would be a high risk that it goes off track quickly.  This deal says that “ownership by the Greek authorities is key” but this may not be forthcoming if the strong policy conditionality is perceived to have been forced on the government.  The economic damage inflicted by the closure of Greek banks will make meeting program targets more difficult.  The deal provides for strong monitoring and oversight by Greece’s creditors, but this has not kept the country’s previous bailouts on track.

Aiming for €50b from a scaled-up privatization program after state assets are transferred to an independent fund appears ambitious, although the new mechanism may be more effective than previous efforts (details of how the fund will operate are not set out).

Estimated recapitalization needs of up to €25b would be consistent with a scenario where non-performing exposures are formally classified as non-performing loans (NPLs), coverage is kept around 60%, and capital ratios are strengthened by around 4pp to cover potential future losses.  At end-Q1/15 the four largest Greek banks reported an additional €26.6b of non-performing exposures using the European Banking Authority’s wider definition that were not yet classified as NPLs.

The insistence on prompt implementation of the Bank Recovery and Resolution Directive suggests recapitalization is likely to be accompanied by a resolution action that at a minimum will wipe out the banks’ equity and remaining subordinated debt.  Recapitalization of the Greek banks by the ESM would be likely to require bail-in of 8% of liabilities and own funds.  The equity/assets ratios (including preference shares) of the four largest banks were 8% – 10% at end-Q1/15, so this would write off most of the banks’ reported equity at that date. Losses since then are likely to have reduced this figure.

We believe the intention to make €10b available in a segregated ESM account for potential bank recapitalization needs and resolution costs, ahead of a comprehensive assessment by the ECB and the Single Supervisory Mechanism after the summer, is intended to facilitate continued access to ECB and Emergency Liquidity Assistance (ELA) funds.  An ECB spokesman said the central bank had maintained its €89b ELA cap on 13 July.  But capital controls in some form are likely to remain for some time.  (Fitch 13.07)

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The Fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, but active throughout the region and beyond. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce, as well as European clients.