UAE in $22bn Talks for Beach Land Development in Egypt

The United Arab Emirates (UAE) is in advanced negotiations to acquire and develop a significant parcel of land on Egypt’s Mediterranean coast, potentially injecting much-needed support into the troubled Egyptian economy.

An UAE consortium is set to collaborate with Egyptian partners for the development of Ras el-Hekma, located approximately 350km northwest of Cairo, according to statements from Hossam Heiba, CEO of the state-run General Authority for Investment and Free Zones. The initial estimate for the ambitious project stands at $22 billion, and an official agreement is anticipated soon, though specific details and involved entities remain undisclosed.

Egypt’s cabinet hinted at the impending announcement of projects designed to generate substantial foreign currency and create numerous job opportunities. These developments align with the proposed multibillion-dollar initiative along the Mediterranean coast, featuring upscale luxury resorts.

Reports suggest the emirate of Abu Dhabi, representing the UAE, is part of the venture. Bloomberg notes that Egypt might retain ownership of approximately 20 percent of the extensive territory, covering 180 million square meters. This minority stake could involve entities such as the Talaat Moustafa Group and certain state entities, although a final decision has not been confirmed.

This significant deal has the potential to strengthen ties between Egypt and the UAE, a key supporter of Egyptian President Abdel-Fattah el-Sisi, providing economic aid through investments and other means.

Egypt, grappling with its most severe foreign exchange crisis in decades, has undergone multiple currency devaluations and is contemplating another soon, marking its fourth since early 2022. A boost in foreign currency could positively impact Egypt’s negotiations with the International Monetary Fund (IMF) for a substantial loan, potentially involving other partners and securing around $10 billion in financing.

As Egypt faces significant foreign debt repayments this year, the IMF advocates for measures such as state asset sales, private sector involvement, and flexible currency trading to address economic challenges.

Last month, an International Monetary Fund (IMF) team visited Egypt for discussions on reviving and potentially expanding a $3 billion loan agreement that encountered challenges shortly after its signing in December 2022.

In addition to its economic engagements, Egypt, alongside Qatar, plays a crucial role as a mediator in talks focused on halting Israel’s conflict with Gaza. The negotiations aim to initiate a temporary ceasefire and facilitate the exchange of Palestinian prisoners held in Israeli jails for captives in the Gaza enclave.