TV Live Menu
Loading data...

Egypt announces $35 billion UAE investment on Mediterranean coast

26.02.24 16:30

Egypt announces $35 billion UAE investment on Mediterranean coastEgypt said on Friday it had signed a deal with the United Arab Emirates to develop a prime stretch of its Mediterranean coast that would bring $35 billion of investments to the indebted country over the next two months.

The deal with ADQ, the smallest of Abu Dhabi's three main sovereign investment funds, is for the development of the Ras El Hekma peninsula and could eventually attract as much as $150 billion in investments, Egyptian Prime Minister Mostafa Madbouly told a press conference.

Such inflows would provide a huge boost to Egypt's crisis-stricken economy as it faces new pressures linked to the war in Gaza and seeks an expansion of its current IMF support programme.

The country has long struggled to attract large-scale foreign investment outside the hydrocarbons sector. In the financial year that ended in June 2023, net foreign direct investment stood at $10 billion.

Egypt's sovereign dollar bonds soared on Friday ahead of the announcement and continued their rally into the afternoon.

Longer-dated bonds enjoyed the biggest gains, with those maturing in 2031 or beyond up more than 4 cents in the dollar to trade at 65.5-73.4 cents - for most their highest level in around a year, Tradeweb data showed.

"If the financing comes through as planned, we believe this (along with an upsized IMF programme) should provide ample liquidity to cover Egypt's financing gap over the next four years," Farouk Soussa of Goldman Sachs said in a note.

Ras El Hekma lies about 200 km (124 miles) west of Alexandria in an area of upscale tourist resorts and white sand beaches popular with wealthy Egyptians during the summer months.

ADQ said work to build the "next generation city" over 170 square kilometres - nearly a fifth of the size of Abu Dhabi city - would begin in early 2025. The city would feature investment zones, technology and light industry, amusement parks, a marina and an airport as well as tourism and residential developments.

Source: Reuters