Saudi-Egypt joint venture invests in housing project
At a signing ceremony on Wednesday, the Saudi Egyptian Construction Company agreed to raise its capital from US$75 million to $318 million.
Under the terms of the new deal, Saudi Arabia contributed $121.5 million in cash, while Egypt contributed its share in kind, in the form of state-owned land in New Cairo, New Assiut and New Damietta.
The company, also known as Secon, is a joint venture between the Egyptian and Saudi Arabian governments, established in 1975 to develop real estate projects in Egypt. It has constructed both touristic projects on Egypt’s North coast and urban housing and commercial complexes in Cairo, Alexandria and the Nile Delta.
The company’s current projects include the Secon Nile Towers, a luxury hotel and residential complex in Maadi, for which the company last year signed a LE928 million-construction agreement with UAE based Arabtec, the same company that has been contracted for a $40 billion mass housing project in Egypt.
According to a statement released today by Egypt’s cabinet, Secon has LE7 billion worth of investments in Egypt, and intends to increase this figure to LE10 billion within five years. The bulk of its resources will be directed to middle and upper income housing units.
Egypt’s Cabinet hailed the company as a “successful model for joint investments between the government of the Kingdom of Saudi Arabia and the Government of the Arab Republic of Egypt” and said it is a “positive indicator of the depth of the relationship between the two countries.”
Since Mohammed Morsi was overthrown in August 2013, Saudi Arabia, along with Kuwait and the United Arab Emirates, has provided Egypt with billions of dollars in aid, largesse that has helped keep the country afloat as tourism and foreign direct investment withered. It was widely speculated that support, including joint investment projects, would increase after the election of President Abdel Fattah al-Sisi.
Following Sisi’s election, Saudi King Abdullah bin Abdul Aziz called on Egypt’s allies to organize a donor conference, and last Friday the king made a brief state visit to Egypt as an additional show of support.
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