CAIRO - 26 February 2024: The Eighth Annual Summit of Capital Markets discussed on Monday the Ras El Hikma city development deal during its first session.
The session which entitled,”Promotional efforts to attract foreign direct investment,” included the participation of Ahmed Salem, the CEO of Al Ahly Financial Services, Amr Helal, the CEO of the sell-side investment bank at CI Capital, and Mohamed Aboulghait, Deputy Chairman of the General Authority for the Economic Zone of the Golden Triangle.
The CEO of Al Ahly Financial Services, Ahmed Salem, described the Ras El Hikma city development deal as "very important," emphasizing that its significance extends beyond its financial value.
He noted that the deal sends a message that despite global and regional challenges, Egypt still offers attractive investment opportunities, and if utilized, it will yield excellent returns.
He highlighted the support from Gulf partners, mentioning their interest in strong-return opportunities.
"This deal marks the beginning of a new period for upcoming opportunities and investment inflow,” Salem added.
For his part, the CEO of the sell-side investment bank at CI Capital, Amr Helal, stated that this deal is a promising start for other deals to follow, and they don't necessarily have to be of the same size.
He mentioned that the returns from this deal will contribute to closing the financing gap this year and beyond, alongside funding from the International Monetary Fund (IMF) and other sources.
Furthermore, Deputy Chairman of the General Authority for the Economic Zone of the Golden Triangle, Mohamed Aboulghait, highlighted the diversity of involved parties in the deal, including governmental, sovereign, and private entities.
He noted that debt-to-investment swaps represent a new business model.
The eighth annual summit of Capital Markets took place on Monday under the title "Structural Reforms - Sustaining Development."
The summit is held under the auspices of the Ministries of Finance, Planning and Economic Development, to discuss the structural reforms conducted by the Egyptian state across all economic sectors with the aim of creating sustainable development.
On Friday, Egypt signed a deal with the Abu Dhabi Developmental Holding Company PJSC (ADQ) - the sovereign wealth fund of the Emirate of Abu Dhabi - to develop the Ras Al-Hikma city, with total investments of $35 billion whose entitlements will be earned within two months, and the state will have a 35 percent share of the project's profits.
The government expects the project to attract investments of up to $150 billion during its development, helping to provide millions of job opportunities and inject liquidity into the Egyptian economy.
Under the deal, Cairo will receive $35 billion within two months, including an $11 billion Emirati deposit in the Egyptian Central Bank, in addition to $24 billion to be injected by the United Arab Emirates.
Egypt will receive 35 percent of the profits from the Ras El-Hikma project, and the state will be committed to cash and in-kind compensation for the residents located on the city's lands.
Egypt's external debt will decrease by $11 billion as a result of converting the Emirati deposit in the central bank into an investment in the project.
This deal comes at a time when Egypt is facing difficulties due to a shortage of foreign currency and the rise in the dollar's price in the parallel market, with increased speculation by traders, impacting commodity prices and inflation rates.
"We are very close to completing our agreement with the International Monetary Fund (IMF)," Madbouly said, and the Fund's director had earlier stated that it was nearing reaching the core pillars of the agreement with Egypt.
A statement from the Emirati Holding Company revealed that it would acquire development rights for the Ras El Hikma project for $24 billion with the aim of developing the region into one of the largest new city development projects through a special coalition.
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