Finance

Egypt to receive $30bn by June but denies $1.5bn new Saudi deal

By Pramod Kumar, Edmund Bower

April 22, 2024

Egypt's finance minister Mohamed Maait said the second payment from the Ras El Hekma project is estimated to be $20bn

Egypt to receive $30bn loans
Ras Gamila development rumoured
Minister says no offers considered yet

An Egyptian government spokesperson rebuffed reports on Sunday that the Saudi firm Ajlan & Bros had submitted a $1.5 billion proposal to develop Ras Gamila on the Red Sea.

A spokesperson for the Ministry of Public Enterprise, Mansour Abdelghany, told Ahram Online that no such offers would be considered until an international advisory firm completes an investment plan of the area.

Abdelghany said that an advisory firm has not yet been selected but that the government has established a committee made up of ministers and experts from the Ministry of Housing and the Ministry of Public Business to oversee development plans.

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The government’s statement came hours after Alsharq Bloomberg cited an anonymous source with knowledge of the discussions who said that Ajlan had submitted an official proposal to the Egyptian Council of Ministers.

The proposal reportedly included plans for 10 hotels, ranging from four to five stars with a combined capacity of 3,000 hotel rooms.

Reports emerged in February that Saudi investors were in discussion with the Egyptian government to develop Ras Gamila, an 860,000 sq m area just north of the resort city of Sharm el Sheikh.

The area lies just across from the Saudi islands of Tiran and Sanafir and the planned Neom giga-project on the Saudi coast.

The rumours of its development draw frequent comparisons to the Ras El Hekma deal announced on February 23, in which the Emirati sovereign wealth fund ADQ bought the rights to develop a 170 sq km area of coast on the Mediterranean for $35 billion in fresh money and debt relief.

Finance minister Mohamed Maait said on Sunday that he expects to receive the second tranche of ADQ’s payment, estimated at up to $20 billion, before May.

Maait said that Egypt is also expecting around $1 billion from the World Bank, $1 billion from the European Union and $820 million from the International Monetary Fund, as well as smaller foreign direct investments and deals with other countries including Japan.

In total, Egypt expects to receive between $25 billion and $30 billion before June 2024, Maait told CNBC Arabia.

He added that half of the loan proceeds, especially from the Ras El Hekma project, will be allocated towards reducing debt.

Figures released by the Central Bank of Egypt in December showed the country is expected to spend $27 billion (45 percent of projected general budget revenues) on servicing external debt in the coming financial year.