A landmark agreement was signed on Friday between a UAE consortium, led by ADQ, a sovereign investment fund headquartered in Abu Dhabi, and Egypt, marking a historic $35 billion investment in Ras El-Hekma, the largest foreign direct investment (FDI) ever secured by Egypt.
Under the terms of the agreement, ADQ, a prominent holding company in the region with diverse investments across Abu Dhabi’s economy, will acquire development rights for Ras El-Hekma for $24 billion. Additionally, $11 billion of deposits will be converted to facilitate investments in key projects throughout Egypt.
This monumental project heralded as a significant milestone in bilateral relations, is anticipated to attract up to $150 billion in investments, according to Egyptian Prime Minister Mostafa Madbouly.
To underscore its commitment to Egypt’s economic growth, the UAE’s sovereign fund has established an office in Egypt. The vision for Ras El-Hekma, located on the Mediterranean coast approximately 350 kilometers northwest of Cairo, is to transform it into a premier holiday destination, financial hub, and free zone, spanning over 170 million square meters with cutting-edge infrastructure.
The development will encompass investment zones, technology and light industry facilities, amusement parks, a marina, an airport, as well as tourism and residential complexes. Construction is slated to commence in early 2025.
As part of the agreement, the Egyptian government will retain a 35 percent stake in the development. UAE Minister of Investment, Mohamed Hassan Alsuwaidi, emphasized the significance of the investment in fostering job creation and attracting further foreign direct investment.
Egypt’s North Coast has garnered considerable interest from global investors and tourists alike, showcasing its potential for international collaborations. Ras El-Hekma aims to become a world-class Mediterranean destination featuring luxurious hotels, yacht marinas, and entertainment amenities.
Madbouly announced that the deal would inject $15 billion within the next week and $35 billion within two months, with $11 billion of the funds being converted from existing UAE dollar deposits in Egypt’s central bank.
Viktor Szabo, portfolio manager at Abrdn in London, commented that the agreement underscores Egypt’s resilience and potential for growth, although the benefits may materialize more prominently over the medium term.
As Egypt navigates economic challenges, there is increased pressure to streamline massive infrastructure projects and reduce the state and military’s dominance in the economy.
