Saudi Arabia’s PIF to Boost Investments in Egypt

RIYADH: Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is poised to significantly boost its financial commitment to Egypt. This major development follows a strategic meeting between Saudi and Egyptian officials, aimed at strengthening bilateral economic ties and expanding joint investment opportunities.

Key Meeting: Strengthening Economic Ties

The discussions, held in New Alamein City, Egypt, were centered on enhancing economic cooperation and exploring new investment prospects. The two-day visit saw Saudi Minister of Investment Khalid Al-Falih emphasize his dedication to improving trade relations with Egypt.

Strategic Move: Converting Deposits into Direct Investments

In a statement from the Egyptian Prime Minister’s Office, Al-Falih detailed plans to convert existing deposits into direct investments. “We have a directive to increase the investments of the Saudi Public Investment Fund in Egypt, and a plan to convert our deposits in Egypt into investments,” he announced. This move represents a significant shift from merely holding deposits to actively investing in Egypt’s economy.

Egypt: A Complementary Economic Partner

Al-Falih highlighted Egypt’s role as a critical economic partner for Saudi Arabia. He stated, “We see Egypt as a complement to the Kingdom and also as a promising market and an important platform for exporting to the region’s countries.” This perspective underscores Saudi Arabia’s view of Egypt as a vital partner in regional economic growth.

Collaborative Efforts for Expanded Investments

The Saudi Minister indicated plans to work closely with Egyptian officials to maximize investment potential. “We will work with the Egyptian Minister of Investment to give these investments a greater chance to double and encourage Saudi investors to expand their existing investments,” Al-Falih said. This collaborative approach aims to significantly enhance Saudi investments in Egypt.

Egypt’s Commitment to Supporting Saudi Investments

Egyptian Prime Minister Mostafa Madbouly reiterated his government’s commitment to creating a favorable environment for Saudi investments. “We are keen to follow up on everything related to Saudi investments in Egypt, and I direct to facilitate all procedures related to them, contributing to attracting more new investments,” Madbouly emphasized. This commitment highlights Egypt’s dedication to supporting and growing its economic relationship with Saudi Arabia.

Notable Growth in Economic Relations

Economic relations between Saudi Arabia and Egypt have recently experienced notable growth. As of September 2023, Saudi investments in Egypt have reached $32 billion. Additionally, Egyptian companies have secured a significant share of investment licenses issued by the Saudi Ministry of Investment, capturing 30 percent of the 3,157 licenses granted in the first quarter of the year.

Review of Mutual Funding Protection Agreement

The meeting also reviewed the mutual funding protection and promotion agreement initiated last year to facilitate and safeguard investments in each country’s territory. Madbouly highlighted progress on the agreement, stating, “We have made significant progress in agreeing on most of the agreement’s clauses, and there are a few points currently being discussed between the two parties.” He assured that he personally oversees this important initiative and noted that the Egyptian government has resolved 70 percent of the challenges faced by Saudi investors.

Addressing Challenges and Opportunities

Al-Falih acknowledged both the vast investment opportunities and the challenges in Egypt. “We will work together to solve the remaining issues, and at the same time, we will work on attracting new investments,” he stated. This proactive stance reflects Saudi Arabia’s commitment to addressing challenges and capitalizing on investment opportunities in Egypt.

Current Investments and Future Cooperation

Muteb Al-Shathri, a representative of PIF, confirmed that the fund’s investments in Egypt currently amount to approximately $3 billion. He highlighted ongoing cooperation between the Saudi fund and the Egyptian Sovereign Fund through the Egyptian government’s offering program.

Egypt’s Investment Priorities

Hassan El-Khatib, Egypt’s newly appointed investment minister, reaffirmed the commitment to nurturing existing Saudi investments. “We currently prioritize attracting investments from the private sector, and Egypt has promising investment opportunities,” El-Khatib said. He emphasized Egypt’s pride in its partnership with Saudi Arabia and its focus on achieving integration in various sectors such as trade, industry, tourism, and more.

Strengthening the Economic Partnership

The renewed commitment from both Saudi Arabia and Egypt marks a significant step in their economic partnership. By converting deposits into direct investments and addressing existing challenges, both nations are set to drive substantial growth and collaboration across various sectors, further solidifying their economic ties and paving the way for future advancements.