Home News UAE Unveils $35 Billion Investments for Egypt’s Ras El-Hekma

UAE Unveils $35 Billion Investments for Egypt’s Ras El-Hekma

The Egyptian government will retain a 35% stake in Ras El-Hekma project.

By Inc.Arabia Staff
images header

Abu Dhabi-based investment powerhouse ADQ has announced an investment initiative totaling $35 billion for the development of the Ras El-Hekma region in Egypt. [1]

As part of the investment strategy, ADQ is set to acquire development rights for Ras El-Hekma at a staggering $24 billion, positioning the area as one of the largest new city developments under private consortium management. Additionally, ADQ will allocate $11 billion in deposits towards prime projects across Egypt.

Ras El-Hekma, located approximately 350 kilometers northwest of Cairo, has breathtaking mideterranean seafronts, white sandy beaches, and unspoiled natural habitats.  ADQ said work to build the "next generation city," "state of the art," over 170 square kilometers, would begin in early 2025.

The city would feature investment zones, a technology and light industry, amusement parks, a marina, and an airport, as well as tourism and residential developments.

The Egyptian government will retain a 35% stake in the Ras El-Hekma project.

The mega project comes with a cash influx that is set to boost Egypt's crisis-stricken economy. Egypt’s government business strategies have faced criticism, with the huge expenditure on mega infrastructure projects that recently came to a halt due to a lack of funds, foreign currency reserves dwindling, inflation accelerating to record levels in the last few months, and the debt burden rising. The recent war on Gaza and lost revenues from the Suez Canal after attacks on shipping in the Red Sea by Yemen's Houthi movement, have added further strain on an already strugling economy. 

Egypt's Prime Minister, Mostafa Madbouly, said the deal would bring in $15 billion in the next week and $35 billion over two months. The deal should provide Egypt with much-needed liquidity for the coming few years.

As soon as the deal was announced over the last weekend, the USD dollar exchange rate dropped in Egypt's parallel currency exchange market, dropping from 62 to 50 USD to EGP, according to Egyptian local media reports. The past few weeks have witnessed a lot of anticipation about whether the Egyptian government will float the EGP and make the official rate close to the real currency value, or let it float or pump investments like that recent one. 

A $3 billion financial support package from the International Monetary Fund signed in December 2022 faltered after Egypt paused on a pledge to move to a flexible exchange rate regime and progress on state asset sales proved slow.

Experts say the deal needs to be combined with economic reform strategies to make a strong impact. 

"The exchange rate needs to become more flexible with monetary policy geared to bring inflation down to target. High public debt makes Egypt more vulnerable to external shocks. Committing to a credible consolidation strategy is key to restoring public finance health, which would improve investor confidence and thereby reduce debt servicing costs,” according to OCED’s recent Economic Survey of Egypt. 

Last update:
Publish date: