UAE to Invest $35 Billion in Ras El-Hekma in Landmark Deal

In a groundbreaking move set to redefine Egypt’s coastal landscape, ADQ, an Abu Dhabi-based investment and holding company, is spearheading a USD 35 billion investment in the Ras El-Hekma region. The project has been described by Egypt’s Prime Minister Mostafa Madbouly as the biggest deal in his country’s history.

ADQ is set to purchase the development rights for Ras El-Hekma for $24 billion and invest an additional $11 billion in real estate and other prime projects in the country. The funds for these investments will come from the UAE’s deposits at Egypt’s central bank.

Also, Talat Mustafa Group has declared a collaboration with ADQ Holding for the comprehensive development of the Ras Al-Hakma Project in North Coast City, Egypt. The group affirms that this initiative aligns with its strategy of generating additional value for shareholders by enhancing the group’s profits.

ADQ will lead a consortium to develop the Ras El-Hekma region, located northwest of Cairo, and expects to attract more than $150 billion in investment for the projects.

As a result of the agreement, Egypt is set to receive $24 billion in fresh liquidity. The UAE will also convert its $11 billion of deposits held with the Egyptian central bank to fund the plans.

The agreement brings Egypt closer to reaching a new deal with the International Monetary Fund (IMF). The news of the deal led to a surge in Egypt’s foreign bonds, making them the best-performing sovereign debt in emerging markets on Friday.

The financing may assist Egypt in moving forward with a much-anticipated currency devaluation, which would be its fourth since early 2022.

Egypt expects the UAE to make upfront payments in two tranches, including $15 billion within a week and another $20 billion in two months. The funds will help unify the local currency’s official exchange rate with its level in the black market.

The agreement has been hailed as “extraordinary support and unprecedented generosity” from the UAE by Egyptian billionaire Naguib Sawiris.

The Ras El-Hekma project will include a financial and business district to attract international companies, as well as schools, hospitals, universities, and a marina for yachts and cruise ships. Egypt expects to attract 8 million additional tourists after completing the city.

The pact will deepen ties between Egypt and the UAE. The energy-rich Gulf country has pledged support via investments and other assistance for an Egyptian economy mired in almost two years of crisis.

Work is expected to commence in early 2025 in Ras El-Hekma, whose vast territory of over 170 million square meters is roughly three times the size of Manhattan.

The size and timeframe of the deal have been described as groundbreaking and fundamentally changing Egypt’s outlook. The inflows will go a long way in covering Egypt’s external funding requirements and clearing the FX backlog.

Moreover, the deal also involved notable legal figures in Egypt, such as Mohamed El Hennawy, VP & Group General Counsel at TALAAT MOSTAFA GROUP HOLDING COMPANY ‘TMG HOLDING’

and also Bashar Al-Rousan Chief Legal and Compliance Officer at ADQ