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Egypt – Strategic Hub for MENA Digital Services
Egypt is an emerging data center market positioned as a critical connectivity hub between Europe, Asia, and Africa. For businesses targeting growth across the Middle East and North Africa (MENA), establishing a presence here offers a strategic advantage, leveraging its extensive subsea cable infrastructure to reduce latency and improve service delivery to a large and growing digital population.
Egypt: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong subsea cable landings, but terrestrial and peering infrastructure is still developing. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access requires network extension to European hubs like Marseille or Milan. |
| Power Cost | EGP 2.50-3.50/kWh | Industrial power costs are moderate, sourced primarily from natural gas and hydro. |
| Disaster Risk | Moderate (4.3/10) | Primary risks include river flooding, coastal flooding, and earthquakes. |
| Tax Incentives | No | Egypt does not currently offer specific tax incentives for data center development. |
| Sales Tax | 14% VAT – as of September 2025 | A standard Value Added Tax applies to services and equipment. |
Network & Connectivity Ecosystem
Egypt's unique geography makes it a critical nexus for global data traffic, with numerous subsea cables landing on its shores. While the ecosystem is still maturing, the foundation for a major regional hub is in place.
Carrier Density & Carrier Neutrality: As of September 2025, the market is served by a foundational set of providers, with a single data center offering services. Carrier neutrality is limited as the market develops.
Direct Cloud On-Ramps: There are no direct, in-country public cloud on-ramps from major providers as of September 2025. Businesses require private network extensions (PNI/wave) to connect to cloud regions in European hubs such as Marseille, Athens, or Milan.
Internet Exchange Points (IXPs): Public peering is not a dominant feature of the ecosystem. Most traffic exchange occurs through private peering arrangements or is routed internationally. The nearest major public exchanges are in Europe.
Bare Metal: Bare metal server availability is emerging. Providers like Hivelocity can offer compute solutions in the region, often deploying from nearby European locations to serve Egyptian users with the lowest possible latency.
Power Analysis
Average Cost Of Power: Industrial electricity prices are estimated between EGP 2.50 and EGP 3.50 per kWh as of September 2025. The country's power mix is heavily reliant on natural gas (~85%), with hydropower (~10%) and renewables making up the rest. This pricing structure offers relatively stable operational costs for compute infrastructure.
Power Grid Reliability: The national power grid is undergoing modernization to support growing industrial and digital demands. In key commercial zones, the grid is generally reliable, and modern data centers are engineered with multi-layered redundancy, including UPS systems and backup generators, to ensure uptime.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data center facilities are strategically located to serve Cairo, the nation's economic and commercial heart. This proximity provides low-latency connectivity for the financial services, technology, and government sectors concentrated in the capital.
Regional Market Reach: With a population of over 100 million, Egypt is a massive domestic market. Its location also makes it an ideal digital gateway to serve North Africa, the Levant, and other parts of the Middle East, connecting hundreds of millions of users.
Tax Advantage For Data Centers: Egypt does not offer specific tax incentives for data center investment or operations. The government has focused on broader economic reforms, but the digital infrastructure sector does not currently benefit from targeted tax relief.
Natural Disaster Risk
Egypt has a moderate overall disaster risk profile, with an INFORM Risk score of 4.3 out of 10 as of September 2025. The risk landscape is defined by specific, predictable environmental factors rather than frequent, widespread events.
The most significant natural hazards include:
- River Flood: Score 9.9
- Coastal Flood: Score 9.0
- Tsunami: Score 5.9
- Earthquake: Score 4.6
While tropical cyclone risk is negligible, the primary concerns for infrastructure planning are related to seismic activity and flooding in vulnerable low-lying coastal and Nile Delta areas.
