CAIRO - 23 February 2024: Egypt signed on Friday an investment partnership agreement with the United Arab Emirates (UAE) to develop the city of Ras El Hikma west of Alexandria, in one of the largest deals in the country's history.
Egyptian Prime Minister Mostafa Madbouly stated that the project represents the largest direct investment deal in the country's history, noting that it will bring $150 billion in investments to Egypt over the project's lifetime.
Madbouly revealed that the deal includes the payment of $35 billion by the Emirati side, to be provided within two months, with Egypt receiving 35 percent of the project's profits throughout its duration.
He mentioned that the project will be a collaboration between the Egyptian New Urban Communities Authority and the Abu Dhabi Developmental Holding Company (ADQ). The amount to be paid in advance includes $11 billion of Emirati deposits in the central bank, which will be relinquished and converted into Egyptian pounds for investment in the project, effectively eliminating it from Egypt's external debt.
Egypt Today (ET) highlights five key factors that the investment deal represents.
First: The success of the Egyptian real estate export strategy
The Ras El Hikma project comes as a culmination of the Egyptian administration's efforts over the past eight years to transform Egypt into a global investment destination on all fronts, especially in the real estate sector.
Entire economies in the region and globally rely on the real estate sector as a driver of economic growth, with examples like the real estate-driven growth seen in China and the success of Dubai, while Saudi Arabia is currently attempting to implement a similar strategy.
Moreover, the Egyptian partnership with major real estate companies in the region brings in substantial investments, mitigating the severity of the economic crisis, creating long-term job opportunities, and aiding in the utilization of neglected real estate assets.
This partnership opens the door for further Egyptian collaborations with global and regional real estate companies to develop more Egyptian tourist and commercial areas, providing additional employment opportunities and injecting more dollars into the economy.
Second: The largest real estate export deal in Egyptian history
The Ras El Hikma project stands as the largest real estate deal in modern Egyptian history, unparalleled by any other real estate transaction or project.
Third: The Egyptian National Projects program
This partnership wouldn't have materialized without the extensive Egyptian National Projects program, which interconnected various parts of the Egyptian state. The Gulf of Ras El Hikma is now directly linked to Cairo and Alexandria through the El-Dabaa axis and the North Coast road, facilitating easy access.
Additionally, a massive residential block can now commute to the city after the development of Alamein and its connection through the Al-Fouka road, making the city an attractive investment destination.
Furthermore, the city currently has access to electricity and fresh water following the comprehensive upgrade of the Egyptian electrical grid and the provision of water desalination stations for the city.
Fourth: A partnership, not a sale
The project represents a partnership between the Egyptian side and the largest real estate developers in the region, not a sale of the city's land.
The development takes place on Egyptian soil, creating job opportunities for Egyptians, both in constructing and later managing the projects, injecting billions of dollars into the Egyptian economy.
Moreover, The project aims to transfer expertise to the Egyptian workforce in constructing massive projects and managing major tourist projects. This contributes to upgrading Egyptian companies and labor for further export of their services, especially in Africa and Asia.
Fifth: A testament to the health of the Egyptian economy
The project serves as a strong testament that the structures of the Egyptian economy are robust and flexible simultaneously. The current challenges are viewed as temporary due to the global economic environment.
It signals the Egyptian government's intention to the world to facilitate a business-friendly environment for everyone. It dispels any notion of the government's inclination to compete with the private sector, whether domestic or foreign.
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