Egypt has secured the first $5 billion tranche in the Ras al-Hekma property development deal, with a second $5 billion instalment slated for Friday, according to the Egyptian Prime Minister's announcement on Thursday.
President Abdel Fattah al-Sisi had confirmed on Wednesday that a portion of the funds from the $35 billion agreement with the United Arab Emirates (UAE) for the Ras Al-Hekma project has been deposited into Egypt's central bank.
The pact aims to develop the coastal peninsula of Ras Al-Hekma.
To bolster the project, the Egyptian government has transferred 170.8 million square meters of army-owned land to the state-owned New Urban Communities Authority for the construction of 'New Ras El Hekma City'.
Ras Gamila
Similar plans are also in motion for the development of Ras Gamila, a largely vacant seaside area near Sharm el-Sheikh, following the Emirati investment deal.
A committee, formed after a cabinet decision, is preparing a strategic vision for Ras Gamila and its surroundings, according to Mansour Abdel Ghany, spokesperson for the Ministry of Public Enterprise.
While the government is considering engaging a consultant to maximize land benefits, the recipient remains undecided.
Contrary to earlier reports indicating Egypt's intention to offer the land to Saudi Arabia, Abdel Ghany denied any ongoing negotiations for Ras Gamila.
Amid economic challenges, foreign debts, and a significant budget deficit, Egypt is aggressively pursuing the sale of state assets to address its financial woes. The recently announced UAE foreign direct investment is expected to provide a short-term boost to Egypt's economy.
Economic analysts anticipate a positive impact on the Egyptian pound (EGP), projecting it to trade at 45 EGP per USD by year-end on the black market, surpassing initial forecasts of 55 EGP per USD, thanks to the influx of UAE foreign direct investment. The official rate is 30 EGP/USD.
However, challenges persist as Egypt grapples with an economic crisis exacerbated by the war in Gaza and the Western-Houthi standoff in the Red Sea, resulting in a 55% to 60% decline in Suez Canal traffic, a crucial source of foreign currency.
The Chairman of the Suez Canal Authority revealed a 46.7% YoY decline in receipts to $428 million in January.
Egypt is expected to devalue its currency on the official market following the finalization of a loan agreement with the International Monetary Fund, which advocates for a flexible exchange rate regime.
Reuters contributed reporting