As Egypt continues to face economic troubles and persistent inflationary pressures, a groundbreaking agreement with the UAE emerges as a potential game-changer. 

Representing the most significant foreign direct investment (FDI) ever recorded in Egypt’s history, this deal sees Abu Dhabi-based sovereign investor ADQ pump $35 billion into developing Ras El-Hekma, a coastal region northwest of Cairo.

ADQ will invest $24 billion to acquire development rights for Ras El-Hekma, with an additional $11 billion allocated for prime projects across Egypt.

ADQ, a regional powerhouse with a diverse portfolio, established an office in Egypt to solidify its commitment to the country’s economic growth. The vision for Ras El-Hekma is ambitious, aiming to transform the region into a world-class holiday destination, financial center, and free zone, spanning over 170 million square meters and boasting cutting-edge infrastructure.

The project is expected to generate significant benefits, including job creation, foreign investment, tourism, and economic growth.

The Egyptian government will retain a 35% stake in the project, reflecting a collaborative approach. Egyptian Prime Minister Mostafa Madbouly projected the development to attract $150 billion in investments and draw eight million more tourists upon completion.

Mohamed Hassan Alsuwaidi, UAE Minister of Investment, said the agreement demonstrates the “UAE’s commitment to supporting Egypt in realizing its economic potential.”

Egyptian Prime Minister Mostafa Madbouly said this deal would be “the beginning of correcting the course of the Egyptian economy.”

Following the news, Egypt’s foreign bonds witnessed a significant rise in value, becoming the top-performing sovereign debt in emerging markets.

The influx of foreign currency could facilitate the implementation of a long-awaited Egyptian currency devaluation. Despite persistent urging from the International Monetary Fund in recent months, Egyptian authorities have hesitated, likely awaiting a significant surge in foreign currency reserves. Industry experts suggest that this influx would provide the necessary cushion for the adjustment to be executed without fear of overshooting the mark.

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