Egyptian Prime Minister Mostafa Madbouly said on Thursday that Saudi Arabia’s plans to pump $5 billion in new investments into Egypt are separate from the kingdom’s deposit in the country’s central bank.
The Egyptian cabinet said on Monday that Saudi Crown Prince Mohammed bin Salman had directed the Saudi Public Investment Fund to invest $5 billion in Egypt in what it described as a “first phase.”
The Cabinet agreed to consider the electricity interconnection project between Egypt and Saudi Arabia as one of the integrated development projects in the Sinai Peninsula.
Data from the Central Bank of Egypt indicates that Saudi Arabia has long-term deposits with the bank worth $5.3 billion.
Egyptian bonds
Egypt’s dollar-denominated sovereign bonds rose to their highest levels in two years today, Tradeweb data showed, after Madbouly announced the Saudi investments.
The bond due in 2059 was the biggest gainer, up 1.35 cents to 77.60 cents on the dollar.
Near-term bonds were offered at a high of 99.52 cents.
Data from the Central Bank of Egypt indicates that Saudi Arabia has long-term deposits with the bank worth $5.3 billion as of December 31, 2023.
The Egyptian Prime Minister said that his visit to Saudi Arabia during the past few days witnessed the completion of the draft agreement to protect joint Egyptian-Saudi investments, which includes encouraging investors to enter Egypt with some administrative procedural incentives by specifying mechanisms for resolving investor disputes quickly.
Madbouly pointed out that Saudi Arabia is witnessing increasing Egyptian investments, citing what the Saudi Minister of Investment said that more than 5,700 Egyptian companies are present in Saudi Arabia with an estimated investment volume in the coming years reaching 70 billion riyals ($18.65 billion).
5 areas for investment
Regarding the offering of the Ras Banas area for investment and the trends of offering more areas for investment, Madbouly said that Egypt has identified 4 to 5 large areas on the Red Sea coast, and it is aimed to develop these areas similar to Ras El-Hikma.
Regarding the energy sector, Madbouly said that his government has worked over the past period to secure the state’s needs to avoid a return to power cuts in what is called “load shedding,” adding, “We will not cut off electricity again.”
He explained that Egypt spent more than $2.5 billion to get through the summer without reducing the electrical loads, adding that Egypt will add 4 gigawatts of electricity production capacity from renewable energy next year.
Madbouly also said that Egypt’s natural gas production will return to its pre-crisis level before the end of June, indicating that the government is moving to settle its arrears with production companies.
Madbouly attributed the decline in production to arrears, but he did not mention the amount owed by the government, nor did he reveal the date of their payment.
Sources told Reuters in March that the government had allocated up to $1.5 billion for payments to foreign oil and gas companies operating in the country.
