The al-Sisi regime in Egypt finds itself in an economic predicament characterized by a large debt, a struggling credit rating and an increasingly depreciated currency. Additionally, the country’s economy has been negatively impacted by the influence of the Houthis on the Red Sea and the Suez Canal. However, a potential deal, estimated to be worth around $22 billion, is currently under consideration. The deal would involve a consortium from Abu Dhabi purchasing 180 million square meters in the Ras al-Hakhma area, situated along the Mediterranean Sea, and developing it with local partners, as reported by Bloomberg.
The prospective complex is located about 350 km northwest of Cairo. In a CNBC interview, the head of the National Investment Authority, Mr. Hussam Khaiva, mentioned that the signing of the agreement to infuse foreign currency into the Egyptian market is expected to occur soon. He did not disclose the identities of the companies or authorities involved. Sources familiar with the specifics of the deal told Bloomberg that Egypt is expected to keep ownership of about 20% of the area through the Talat Mustafa Group and several national companies as part of the potential agreement.
The northern coast of Egypt, a popular tourist spot during the summer, typically has land prices ranging from 100-120 dollars per square meter. If this price is applied to the suggested area, the cost would be around 18 billion dollars. However, it is doubtful that Egypt’s president, Abdel-Fattah al-Sisi, will get the same price from his ally, the leader of the United Arab Emirates, Mohammed bin Zayed, due to the high demand for foreign currency.
Not the Emirates’ first big deal with Egypt
The potential Emirati-Egyptian deal is not unprecedented as Egypt has previously sold or leased land. In recent years, Saudi Arabia and the United Arab Emirates have leased about 383,000 dunams in the Nile region for agricultural development and local market supply. The difference with the Ras al-Hakhma deal is that it’s a coastal area, and it could be an attempt by the Emirates to establish a naval and possibly military presence in the Mediterranean, similar to what it has done in the Horn of Africa region.
In 2022, the United Arab Emirates deposited approximately 5 billion dollars in the Central Bank of Egypt. Additionally, the ADQ wealth fund acquired about 18% of the International Trade Bank of Egypt and invested hundreds of millions of dollars in Egyptian drilling companies, petrochemical plants and tobacco companies.
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