Logistics

AD Ports to invest $200m to develop Safaga Port in Egypt

By Pramod Kumar

March 19, 2023, 8:06 AM

Safaga Port will be the first internationally operated port in the Upper Egypt region

Abu Dhabi’s AD Ports Group has signed a 30-year concession agreement worth $200 million to develop and operate Egypt’s Safaga port.

In addition, two 15-year agreements, a memorandum of understanding (MoU) and three head of terms (HoT) for ports in Egypt’s Red Sea region and the Mediterranean Sea were signed.

These agreements allow for expanded access to multi-purpose terminals, cruise routes and logistics capabilities in Safaga, Ain Sokhna, Port Said, Hurghada, Sharm El Sheikh and Al Arish.

“AD Ports Group will invest a total of up to $200 million in superstructure and equipment, buildings, and other real estate facilities and utilities’ network inside the concession area. The majority of this capex will be spent in 2024 and 2025,” the company said in a statement.

No currency exposure will be associated with the port’s operations as all revenues will be dollarised.

Safaga Port will be the first internationally operated port in the Upper Egypt region, bringing significant cost savings to traders, industries and businesses in the region.

Mohamed Juma Al Shamisi, managing director and group CEO, AD Ports Group, said that the significant concession agreement with the Red Sea Port Authority for the development of Safaga Port has the potential to play a major role in the global supply chain.

The Abu Dhabi company will invest around $33 million to develop two cement terminals in Al Arish Port and West Port Said Port in collaboration with the General Authority for the Suez Canal Economic Zone.

Under the 15-year agreements, AD Ports Group will construct silos with a storage capacity of up to 60,000 tonnes in Al Arish Port and 30,000 tonnes in West Port Said; each terminal will handle 1–1.5 million tonnes annually. Both terminals will be operational in Q4 2023.

The UAE is Egypt’s second leading trade partner in the region and the number one country in foreign direct investments, accounting for 29 percent of foreign investments in Egypt.

On the other hand, Egypt is the UAE’s fifth leading trade partner in non-oil trade, accounting for seven percent of the total Emirati non-oil trade with Arab countries.