The United Arab Emirates is currently engaged in advanced discussions to acquire and develop a sizable parcel of land on Egypt’s Mediterranean coast, potentially offering a significant boost to the troubled economy of the North African nation.
According to an Egyptian official cited by CNBC Arabia on Wednesday, a consortium from the UAE has been selected to collaborate with Egyptian partners in the development of the land located in Ras el-Hekma, approximately 350km (217 miles) northwest of Cairo. Hossam Heiba, CEO of the state-run General Authority for Investment and Free Zones, indicated that the initial projected investment for the overall project stands at $22 billion, with an agreement anticipated soon. However, specific details regarding the companies or entities involved were not disclosed.
Additionally, Egypt’s cabinet announced on Thursday that the government is gearing up to unveil new projects aimed at generating substantial foreign currency revenue and creating hundreds of thousands of job opportunities, potentially referring to the multibillion-dollar development planned along the Mediterranean coast, which includes upscale luxury resorts.
Reports from Bloomberg suggest that the emirate of Abu Dhabi, representing one of the seven emirates in the UAE and the nation’s capital, is actively participating in the project. Sources familiar with the negotiations mentioned that Egypt might retain ownership of roughly 20% of the expansive territory, spanning 180 million square meters. This minority stake could involve entities such as the Talaat Moustafa Group, a prominent real estate developer, and select Egyptian state entities, although a final decision has yet to be made.
This significant endeavor has the potential to further solidify the relationship between Egypt and the UAE, with the latter being a key supporter of Egyptian President Abdel-Fattah el-Sisi, offering economic assistance through investments and other means in the past.
Egypt currently grapples with severe foreign exchange challenges, necessitating multiple currency devaluations. Another devaluation is anticipated soon, marking the fourth since early 2022. A substantial influx of foreign currency could have positive implications for Egypt’s ongoing discussions with the International Monetary Fund (IMF) regarding a significant loan agreement, potentially attracting additional partners and securing around $10 billion in financing.
With looming repayments of heavy foreign debts, the IMF has been urging Egypt to pursue measures such as selling state assets, fostering private sector participation, and allowing greater flexibility in currency trading. Discussions between Egypt and the IMF have been underway, aiming to revive and potentially expand a $3 billion loan agreement signed in December 2022, following its initial setback.
Moreover, Egypt, alongside Qatar, plays a crucial role as a mediator in efforts to resolve the conflict between Israel and Gaza, including negotiating temporary ceasefires and prisoner exchanges between the two sides.