Daily Management Review

Saudi Arabia invests in Egypt


Late on Saturday, Egypt and Saudi Arabia signed an agreement to establish a joint investment fund with a registered capital of 60 billion Saudi riyals ($ 16 billion).

Jonathan Rashad via flickr
Jonathan Rashad via flickr
In addition, the countries agreed to establish a free trade zone in the Sinai Peninsula. The signing of the documents, held in the Palace Abdin in the center of the Egyptian capital, was attended by Egyptian President Abdel Fattah al-Sisi, and the Saudi monarch Salman bin Abdul Aziz al-Saud.

Now Egypt is making every effort to stimulate economic growth. After the uprising in 2011, the unstable political situation established in the country. It resulted in almost completely blocked flow of tourists and foreign investors, which are the main source of foreign exchange earnings.

The Egyptian state television channels announced the establishment of "the Saudi-Egyptian investment fund with a capital of 60 billion Saudi riyals between the Fund Saudi government investment and by members of its composition, as well as the Egyptian government and its subordinate organizations."

Above that, the politicians signed a memorandum of understanding between the Saudi government investment fund and the Ministry of International Cooperation of Egypt for the establishment of a free economic zone in the Sinai Peninsula.

The two countries signed an agreement on the development of a power plant capacity of 2250 megawatts worth $ 2.2 billion, on the establishment of agricultural systems in the Sinai Peninsula, and the development of water supply system.

The statement also refers to the beginning of the development of the industrial zone area of 6 square km. around the Suez Canal in Egypt, the cost of the project is $ 3.3 billion.

Saudi Arabia, along with other oil producers in the Persian Gulf, is pumping billions of dollars into the weakening economy of Egypt, as in 2013, the Egyptian army overthrew President Mohammed Morsi after a series of mass protests. 

Some of the projects, which was announced on Saturday, refers to investments in the private sector. Last week, the deputy head of the Saudi-Egyptian Business Council said that Saudi businessmen are going to invest about $ 4 billion in projects in Egypt. Egyptian banks already have 10% of this amount.

Egypt seeks to increase the inflow of foreign direct investment to $ 8- $ 10 billion in 2015-2016.

On Friday, King Salman also said announced planned construction of a bridge across the Red Sea that would connect Egypt and Saudi Arabia.

Egypt has also signed an agreement in the field of development of relations with Saudi Arabia worth $ 590 million, said the Minister of International Cooperation of Egypt Sahar Nasr.

source: reuters.com