CAIRO - 23 February 2024: Egypt signed a development contract for the Ras El Hikma project in partnership with the United Arab Emirates (UAE) on Friday, marking the largest investment deal in Egypt's history.
The deal involves $150 billion in investments during the project development period, including around $35 billion in direct investments for the Egyptian state within two months.
During the announcement ceremony of the largest investment deal, Egyptian Prime Minister Mostafa Madbouly stated that the investment deal represents the largest direct investment deal in Egypt's history, specifically for the development of the new city project, Ras El Hikma, on the North Coast.
Madbouly added that the project involves the development of integrated urban communities on the North Coast rather than just tourist resorts.
He explained that the UAE side will inject foreign direct investment into Egypt, totaling $35 billion within two months, to be paid in two installments. The first installment, within a week, amounts to $15 billion (including $10 billion in liquidity from abroad, in addition to $5 billion from UAE deposits at the Central Bank of Egypt).
"The second installment will be paid after two months, totaling $20 billion (including $14 billion in liquidity from abroad, in addition to $6 billion from UAE deposits at the Central Bank of Egypt)," Madbouly disclosed. He revealed that the size of UAE deposits at the Central Bank of Egypt is approximately $11 billion.
The Prime Minister stated that Egypt's external debt will decrease by $11 billion, transferred from an Emirati deposit in the central bank to an investment in the project.
Madbouly also stated that Egypt's share of the profits from the Ras El Hikma city project on the North Coast is estimated at about 35 percent.
According to Madbouly, the development project of Ras El Hikma covers an area of 170 million square meters, including recreational, service, industrial, residential projects, a free zone, a central financial and business district, as well as a marina for yachts and tourist ships, and an international airport.
The Egyptian side of the project is represented by the New Urban Communities Authority. The project will involve establishing the Ras El Hikma Company, which will be the holding company for the project, according to the announced data.
Furthermore, the Egyptian government is committed to providing both cash and in-kind compensation to the residents located on the project's lands, Madbouly said.
Madbouly said that this investment deal marks the beginning of correcting the course for the Egyptian economy, adding that Egypt is keen to attract foreign direct investment (FDI).
The Ras El Hikma region will witness a tourist influx of up to 8 million tourists annually, Madbouly noted.
On Thursday, the Egyptian Cabinet announced the approval of the largest direct investment deal through a partnership with major entities.
This comes in the context of the current state efforts to attract foreign direct investment (FDI) and increase the country's foreign exchange resources, according to the cabinet’s statement.
Prime Minister Mostafa Madbouly stated that this major investment deal, conducted in partnership with major entities, achieves the state's development objectives outlined in the National Strategic Urban Development Plan.
He noted that this deal marks the beginning of several investment agreements the government is currently working on to increase the country's foreign currency resources.
The Prime Minister explained that the complete details of this deal will be announced, along with the signing of the relevant agreements.
He emphasized that the government's success in attracting massive foreign investments confirms the confidence of major investment entities in the Egyptian economy and its ability to overcome challenges.
The projects resulting from this deal will provide hundreds of thousands of job opportunities, contributing to economic recovery, according to Madbouly.
Additionally, various Egyptian companies and factories will participate in the implemented projects, leading to multiple benefits for the Egyptian state.
“This significant deal, along with others, and the substantial foreign currency liquidity it will provide, will contribute to stabilizing the foreign exchange market and improving the economic situation," the PM emphasized.
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