Egypt and UAE announce $35 billion investment deal to revitalize Ras al-Hekma

Egypt secures a transformative $35 billion investment from the UAE for Ras al-Hekma’s development, aiming to rejuvenate its economy

Egypt’s economy receives a significant boost as the country secures a $35 billion investment deal with the United Arab Emirates for developing the Ras al-Hekma peninsula.

Addressing the media, Egyptian Prime Minister Mostafa Madbouly lauded the deal as a pivotal investment to alleviate the nation’s hard currency crunch. The UAE’s sovereign wealth fund, ADQ, will spearhead the consortium, allocating $24 billion to transform Ras al-Hekma into a resort city, complete with a UAE-managed airport. An additional $11 billion will support other developmental projects across Egypt.

This partnership will unfold in stages, with $15 billion being injected immediately and another $20 billion following within two months. The project is expected to generate a staggering $150 billion, with Egypt retaining a 35% stake.

The timing of this agreement is critical. As Egypt’s economy is heavily reliant on imports, it has been grappling with multiple challenges, including pandemic-induced setbacks to tourism, increased wheat costs due to the Ukraine war, and disruptions in Suez Canal revenues.

These challenges, coupled with a reduction in foreign currency remittances from Egyptian workers abroad, have led to a significant debt burden.

In response, Egypt has pursued financial assistance, including a $3 billion loan from the International Monetary Fund, contingent upon stringent reforms such as establishing a fully flexible exchange rate.

This situation has also resulted in decreased foreign investor confidence, with JP Morgan removing Egypt from its government bonds index and Moody’s downgrading its bond outlook to “negative.”

Ras al-Hekma, located approximately 212 kilometers west of Alexandria, is emerging as a key resort destination. In collaboration with UN-Habitat, the Egyptian government envisions developing a sustainable and inclusive waterfront city as part of this project. The first phase is expected to be completed by 2028.

Source: Newsroom