Egypt and the United Arab Emirates (UAE) have announced a massive $35 billion investment deal to develop the Ras El Hikma peninsula.
According to Reuters, the deal with ADQ, a prominent sovereign investment fund from Abu Dhabi, is a major milestone for Egypt. The agreement will bring $35 billion into Egypt’s economy in the next two months, with potential projections reaching up to $150 billion.
The Ras El Hikma peninsula is set to undergo a major transformation, becoming a hub for investment, residential areas, commercial spaces, and tourism facilities. The project is scheduled to begin in 2025.
The announcement of this initiative has been well-received by the markets, with Egypt’s sovereign dollar bonds experiencing a surge in value prior to the news.
Specifically, bonds maturing in 2047 or later saw an increase of over 3 cents in the dollar, reaching their highest level in about a year, according to Tradeweb data.
This rise in bond value reflects the growing confidence investors have in Egypt’s economic future.
Ras al-Hikma’s strategic location, around 200 km west of Alexandria, is already known for its luxury resorts and beautiful beaches, making it an ideal choice for this ambitious development project.
However, aside from the immediate economic advantages, this agreement is a significant advancement for Egypt in its ongoing struggle against a slowly developing economic crisis marked by a persistent lack of foreign currency, increasing debt, and continuous pressure on the Egyptian pound.
Despite these obstacles, Egypt has been unwavering in its efforts to achieve economic stability and growth.
The country’s collaboration with the International Monetary Fund (IMF) for a $3 billion financial aid package and its dedication to economic reforms, such as transitioning to a flexible exchange rate system, demonstrate a proactive approach to tackling its economic challenges.
