Egypt Receives Second $14 Billion Tranche from UAE for Ras Al Hekma Development
Egypt has received a second installment of $14 billion from the UAE for the development of the coastal city of Ras Al Hekma, according to an announcement by the Egyptian cabinet on Wednesday.
This payment is part of a $35 billion agreement made in February with a consortium led by Abu Dhabi's investment firm ADQ.
Additionally, Egypt has started discussions with the UAE regarding a $6 billion deposit held in Egypt's central bank, with plans to convert it into Egyptian pounds, as stated by Prime Minister Mostafa Madbouly.
In February, the cabinet mentioned that the UAE and the Egyptian central bank were working on converting UAE deposits worth $11 billion into Egyptian pounds. In the same month, ADQ announced its acquisition of the development rights for Ras Al Hekma, a coastal area approximately 350 km northwest of Cairo. Covering more than 170 million square meters, this development aims to attract significant foreign direct investment, increase trade, create jobs, and support Egypt's private sector.
The project will feature hotels, yacht marinas, entertainment centers, as well as residential, commercial, and recreational areas with global connectivity. The Egyptian government will maintain a 35 percent stake in the project, which is expected to commence next year. Prime Minister Madbouly projected that the development could attract up to $150 billion in investments.
This investment from the UAE is a crucial step towards establishing Ras Al Hekma as a leading Mediterranean holiday destination, financial center, and free zone.
In recent years, the UAE has increased its investments in Egypt to support the country's economy and leverage investment opportunities. In April 2021, ADQ purchased Egypt’s Amoun Pharmaceutical Company from Canada's Bausch Health for $470 million. In December of the same year, ADQ opened an office in Cairo and has since acquired stakes in several publicly listed Egyptian companies across various sectors, including FinTech and logistics.
Egypt, the most populous Arab nation, has been facing foreign currency shortages and high inflation. This recent influx of funds could help alleviate currency pressures.
In March, Egypt finalized an agreement with the International Monetary Fund to receive $8 billion in loans, following the Central Bank of Egypt's decision to raise interest rates and allow the local currency to float freely, a crucial condition for the IMF loan approval.
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