Egypt to receive US$5 bn in investments from Saudi Arabia after reforms to support investors reaping the ‘highest returns,’ Madbuly says

Egypt is to receive US$5 billion as a first phase of investment from Saudi Arabia’s sovereign wealth fund in the coming period, the Cabinet announced on Monday evening. 

Speaking at a press conference in Riyadh, Prime Minister Mostafa Madbuly told reporters that Egypt now has “a really good package of investment incentives which helps and encourages any investor, and at their head our brothers in the kingdom, to come, and God willing, to invest and find the highest return on their money.” 

The Cabinet did not specify when the funding from Saudi Arabia could be expected nor the full amount of investments expected.

Incoming funds from Saudi Arabia would boost a series of deals worth over $50 billion in total which Egypt has secured as part of a bailout following two years of economic turmoil sparked by capital flight from the bond market in 2022. 

The prime minister’s visit to Prince Mohammed bin Salman on Sunday included Egypt’s ministers of trade, investment and finance, who met with their counterparts and the head of the Saudi Public Investment Fund.

Bin Salman instructed the fund to pump investments in Egypt totaling $5 billion as a first phase during the meeting, said Egypt’s Cabinet statement, adding that a planned meeting is to take place in October. 

A brief statement issued by Saudi Arabia’s Foreign Ministry said that Madbuly met with bin Salman  to discuss “prospects for joint cooperation and ways to enhance and develop ties.”

Madbuly said on Monday that an agreement to protect and encourage Saudi investments is nearly complete, and is expected to undergo final adjustments before starting the legislative and legal procedures for its official issuance in Egypt, with enactment expected within three months.

Egypt has worked over the recent period since the Cabinet reshuffle to “overcome bureaucracy” and to prioritize simplifying the climate for investors, Prime Minister Mostafa Madbuly told reporters during an evening press conference in Riyadh. He noted impacts across the industry, agriculture, tourism and real estate development sectors. 

Madbuly said that Egypt had found solutions for around “90 problems” with investors from the kingdom, and that only 14 disputes remain, as well as addressing cooperation between the countries regarding traditional and renewable energy generation. 

Madbuly did not announce the planned destination for Saudi Arabia’s investments. Following the announcement of a landmark $35 billion deal which will see developmental rights for a huge area of land on the Mediterranean Coast transferred to an Emirati sovereign fund, rumors circulated in the press months ago that Saudi investors were considering a similar land development project in Ras Gamila. 

The coastal area is located in South Sinai not far from the islands of Tiran and Sanafir, which Egypt ceded to Saudi Arabia in 2015 in a cash-for-land deal that prompted substantial opposition.

According to Reuters, which cited official central bank data, Saudi Arabia had $5.3 billion worth of long-term deposits with the Central Bank of Egypt as of December 31, 2023. 

Saudi Arabia invested over US$1 billion in Egyptian assets in 2022, buying stakes in state-owned shipping, logistics, fertilizers and e-finance firms as part of drive to prop up the economy after Russia’s invasion of Ukraine led investors to withdraw tens of billions of dollars from emerging markets, including Egypt.