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Egypt – Strategic Hub for Middle East & North Africa
Egypt's digital infrastructure is positioned as a critical gateway connecting Europe, the Middle East, and Africa. For businesses targeting emerging markets in these regions, establishing a presence here offers a strategic advantage in reducing latency and improving service delivery. The market is developing, providing foundational colocation services for content delivery networks, service providers, and enterprises expanding their reach.
Egypt: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong subsea cable landings, but terrestrial connectivity is still maturing. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access via network providers to hubs in Europe (e.g., Marseille, Milan). |
| Power Cost | EGP 2.50-3.50/kWh (est.) | Industrial power costs are competitive for the region, supporting large deployments. |
| Disaster Risk | Moderate (4.3/10) | Primary risks are flood-related, with seismic activity also a consideration. |
| Tax Incentives | No | Egypt does not currently offer specific tax incentives for data center development. |
| Sales Tax | 14% VAT | Standard Value Added Tax applies to equipment and services, as of September 2025. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: The carrier ecosystem is growing, with a focus on interconnection at key subsea cable landing stations and in Cairo. While a precise public count is unavailable, the market supports several regional and local providers, with at least one carrier-neutral facility available, as of September 2025.
Direct Cloud On-Ramps: There are no direct, in-country cloud on-ramps from major providers, as of September 2025. Businesses connect to cloud regions in Europe and the Middle East via private network extensions (PNI/wave) or carrier IP transit services. The nearest major hubs for direct cloud access are in Marseille, Milan, and Dubai.
Internet Exchange Points (IXPs): The primary exchange point is the Cairo Internet Exchange (CAIX), which facilitates local traffic peering and improves domestic network performance. Most international traffic exchange, however, relies on private peering or transit through upstream providers.
Bare Metal: Bare metal server options are available in Egypt, primarily through local and regional hosting providers. These services provide dedicated compute resources for performance-sensitive applications that require direct hardware access.
Power Analysis
Average Cost Of Power: The estimated industrial electricity rate is between EGP 2.50–3.50/kWh, as of September 2025. This competitive pricing makes Egypt an attractive location for managing operational expenses for significant compute workloads. The grid relies heavily on natural gas (approximately 85%), with a growing contribution from hydroelectric and renewable sources.
Power Grid Reliability: The national power grid serving major commercial centers like Cairo is generally reliable for business operations. Data centers in the region are engineered with redundant power feeds, on-site fuel storage, and robust UPS systems to guarantee uptime and mitigate any grid instability.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data center facilities are primarily located in and around Cairo, providing low-latency access to the country's main commercial, financial, and governmental hubs. This proximity serves the dense population center and the numerous multinational corporations operating in the capital.
Regional Market Reach: Egypt's geographic position and its extensive network of subsea cables make it a natural interconnection point for traffic flowing between Europe, Asia, and Africa. A presence here can effectively serve users across North Africa and the Levant region.
Tax Advantage For Data Centers: The primary financial advantage is operational rather than tax-based. The absence of specific incentives is offset by competitive power pricing and labor costs, which can significantly lower the total cost of ownership for large-scale deployments.
Natural Disaster Risk
Egypt has a Moderate disaster risk profile, with an overall INFORM score of 4.3 out of 10, as of September 2025. The risk landscape is shaped by specific, localized environmental factors rather than widespread, frequent events.
Key natural hazards include:
- River Flood: Score 9.9
- Coastal Flood: Score 9.0
- Tsunami: Score 5.9
- Earthquake: Score 4.6
While tropical cyclone and drought risks are low, the high scores for river and coastal flooding are significant for infrastructure located near the Nile Delta and the Mediterranean coast.
