Ras al-Hikma: Egypt receives first $5 bln payment from UAE for coastal city project
Egypt has received $5 billion as the first installment of the investment partnership deal with the United Arab Emirates to develop Ras al-Hikma City, Prime Minister Dr. Mostafa Madbouly announced on Thursday. The country expects to receive another $5 billion payment the following day.
In a statement, Madbouly said that coordination between the Central Bank and the UAE side has been made to convert $5 billion from the deposit into Egyptian pounds. Egypt will receive the remaining amount announced in two months, completing the $35 billion direct investment entering the state from this deal. This is in addition to the 35 percent of the net profits of the project that the state will acquire.
A ministerial committee chaired by the Prime Minister will be formed specifically for the Ras al-Hikma development project. Its mission is to facilitate procedures, overcome any obstacles, solve any problems, and coordinate to fulfill our commitments in this project. The committee will have a technical secretariat led by the First Assistant to the Prime Minister, the Chief of the Advisory Board to the Cabinet, and officials from the relevant ministries and agencies responsible for preparing the necessary decisions.
Prime Minister Madbouly stressed that the state aims for the success of this significant and massive developmental project to be a model for building other investment partnerships that would yield many returns for the Egyptian people.
Ras al-Hikma investment partnership
Madbouly clarified that the Ras al-Hikma project is an investment partnership, similar to many projects being implemented between the government and the private sector through partnership systems. He reaffirmed that no clause in the contract affects Egyptian sovereignty, and all clauses are subject to Egyptian laws. It was stipulated that the contract clauses could not be interpreted in any way that contradicts Egyptian law.
Highlighting the project as a start to economic reform, the government will continue its announced measures to rationalize investment spending, enhance governance, and offer wide opportunities to the private sector in various economic sectors.
In a related context, the prime minister mentioned that the minister of the public business sector confirmed today that $520 million had entered the ministry from the “hotel” deals announced recently, with the rest of the dollar dues to be received soon.
Another portion arriving soon
The PM’s announcement came one day after Egyptian President Abdel Fattah al-Sisi said that the Central Bank had received part of the announced amounts in the Ras al-Hikma project deal with the UAE, with another portion arriving next Friday.
President al-Sisi emphasized the government’s honesty and transparency in presenting and announcing project details. He described the project’s scope, area, and the procedures over the coming months and years to make it the largest tourist project on the Mediterranean Sea.
The project is set to become a global city with various year-round activities, some of which will be introduced to Egypt for the first time. President al-Sisi expressed his gratitude to the UAE and its President, Sheikh Mohammed bin Zayed, noting the rapid decision-making and clear support and assistance.
He also mentioned Egypt’s difficult economic situation over the past four years, which has been affected by global crises, including the COVID-19 pandemic, the Russian conflict, and the recent war in Gaza.
Allocation of land
The project – in partnership with UAE’s ADQ – is considered the largest direct foreign investment deal in the history of Egypt.
The official gazette in Egypt also published on Tuesday a decision by President al-Sisi to allocate a land parcel of 170.8 million square meters from the lands owned by the Armed Forces in the Matrouh Governorate to the New Urban Communities Authority for use in the new Ras al-Hikma city project.
Egypt will receive $35 billion from the UAE partner within two months, including $24 billion in new funds and the conversion of $11 billion in UAE deposits in Egypt. Egypt will retain a 35 percent share of the new project’s profits, estimated at a total investment of $150 billion during various execution stages.
Ras al-Hikma, located on the north coast, is part of the Marsa Matrouh Governorate. Its beaches extend from the al-Dabaa area 170 kilometers on the north coast road to 220 kilometers in Matrouh city. The area is strategically important in Egypt’s national urban development strategy, boasting comprehensive developmental attributes that make it a leading tourist, investment, and urban area and a global tourism center in the Middle East and the world.
