BPE Partners, an Egypt based private equity firm, has partnered with Daikin Europe, a wholly-owned subsidiary of Japan-based air conditioning equipment manufacturer Daikin Industries, to establish Daikin Airconditioning Egypt.

The subsidiary, which began operations in August 2016, will focus on expanding Daikin’s business within Egypt, as well as the broader Middle East and Africa region.

Financial details of the transaction were not disclosed.

Daikin established the Egyptian subsidiary, Daikin Egypt, based on a belief that Egypt's growing economy remains the pillar of growth for both the Middle East and Africa.

With the development mega projects and cities such as the New Capital City, the New Suez Canal Development Area, and the expansion of Cairo on the East and West borders, Egypt is paving the way for large-scale urban development projects.

By 2050, the current population of 18 million people in Greater Cairo is projected to climb to 40 million.

This automatically is coupled with investments in construction of office space, retail centers, and healthcare. Consequently, substantial growth is foreseen in the air conditioning market.

To implement these large-scale projects, the Egyptian government has created an environment that expands the role of foreign companies by actively seeking investment from foreign companies.

Furthermore, with the gradual removal of the power subsidies in Egypt, demand for high-efficiency, energy-saving products increased.

In establishing a subsidiary in Egypt, Daikin is laying the groundwork for business development that aggressively competes for large-scale projects by leveraging the local knowledge and investment expertise of BPE Partners and collaborating with the Daikin Middle East Office in Dubai. With energy-saving products ranging from residential to commercial use, Daikin is poised to substantially expand business in Egypt. The success it achieves in the Egyptian market will be used as a springboard to future development in the Middle East and Africa.

BPE Partners, formerly Beltone Private Equity, is an employee-owned private equity manager founded in 2006.

The firm’s investments focus on high-growth, well-managed Egyptian companies that stand to benefit from the fast-growing, underserved middle class.