Egypt and Saudi Arabia signed an agreement to set up a SAR 60bn investment fund among other investment agreements, including an economic free-zone to develop Egypt’s Sinai region, Egyptian state television reported.
The signing of the agreements took place in Egypt’s Abdeen palace in the presence of Egypt’s President Abdel Fattah El-Sisi and Saudi’s King Salman, during a 5-day visit to Egypt.
Egyptian state TV said the agreement was to establish “a Saudi-Egyptian investment fund with a capital of SAR 60bn between the Saudi Public Investment Fund and the entities belonging to it and the Egyptian government and the entities that belong to it.”
A memorandum of understanding was also signed between the Saudi Public Investment Fund and the Egyptian International Cooperation Ministry to set up an economic free-zone in Sinai.
The two countries also signed agreements to develop a 2250 Megawatt electricity plant with a cost of $2.2bn, set up agriculture complexes in Sinai and develop a canal to transfer water, a statement from the Presidency said.
The statement also said that a company was set up to develop 6 square kilometres of the industrial zone around Egypt’s Suez Canal worth $3.3bn, without giving further details.
The investments are part of a change in strategy from Saudi Arabia to focus more on financial support that will also benefit Saudi Arabia with return on investment.
Some of the projects announced include private sector investments. Last week the deputy head of the Saudi-Egyptian Business Council told Reuter’s that Saudi businessmen are investing around $4bn in projects in Egypt and have already deposited 10 per cent of that sum in Egyptian banks.
Egypt is aiming for direct foreign investment of around $8-10bn in 2015/16. Egypt also signed development agreements with Saudi Arabia worth $590m, Egyptian International Cooperation Minister Sahar Nasr said on Friday. She said the signed agreements, with the Saudi finance minister, covered development in the Sinai Peninsula, agriculture, housing and a university.
Several other agreements were signed too, in areas such as education, trade and shipping. They also include a memorandum of understanding between Saudi Aramco and Egypt’s Arab Petroleum Pipelines Company SUMED.
