NewsEgypt sells coastal city Ras el-Hekma to UAE for $35 billion amidst economic crisis

Egypt sells coastal city Ras el‑Hekma to UAE for $35 billion amidst economic crisis

BRUSSELS, BELGIUM - OCTOBER 25: Egyptian Prime Minister Mostafa Kamal Madbouly speaks during Global Gateway Forum in Brussels, Belgium on October 25, 2023. (Photo by Dursun Aydemir/Anadolu via Getty Images)
BRUSSELS, BELGIUM - OCTOBER 25: Egyptian Prime Minister Mostafa Kamal Madbouly speaks during Global Gateway Forum in Brussels, Belgium on October 25, 2023. (Photo by Dursun Aydemir/Anadolu via Getty Images)
Images source: © Getty Images | Anadolu Agency
2:44 PM EST, February 24, 2024

In a press conference attended by representatives from both nations, Prime Minister Madbouly announced that Egypt is set to receive an advance payment of $15 billion within this week, with the remaining $20 billion expected to be transferred within the next two months.

Egypt to sell city to United Arab Emirates

This project represents the largest direct foreign investment of its kind. Ras el-Hekma, situated along the Mediterranean Sea, is set to transform into a modern city complete with residential districts, tourist centers, schools, universities, and an industrial zone. The development plan also includes a financial and business district, as well as a marina and an airport.

This decision by the Egyptian government has attracted heavy criticism domestically. Ras el-Hekma is considered one of the country's most valuable coastal areas, and critics argue local investors should be the ones leading its development. However, Prime Minister Madbouly emphasized the Egyptian government will retain a 35 percent stake in the project's profits, despite it being a predominantly private investment with a consortium from the UAE playing the most significant role.

Egypt faces economic crisis

The deal was struck in the context of Egypt's challenging economic situation marked by a currency crisis, record inflation, and a foreign currency shortage.

Egypt is currently negotiating with the International Monetary Fund (IMF) over a potential rescue package expected to exceed $10 billion. The investment in Ras el-Hekma is aimed to stabilize the exchange rate, create employment opportunities, and attract foreign currency, with hopes of alleviating the current economic crisis.

Both the Egyptian government and its UAE partners hold high hopes for the Ras el-Hekma project to become a symbol of modernization and development. The aim is to attract worldwide investors and to stimulate the Egyptian economy. Its implementation and long-term impacts on the country and its inhabitants, however, will be under careful observation and assessment.

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