Saudi boosts Egypt ties with $16bn investment fund

Saudi Arabia and Egypt have signed a deal to set up a $16bn investment fund to help boost the Egyptian economy.

The deal, announced by Egyptian state television, includes provision for an economic free zone to develop the Egypt’s Sinai region, as well as an agreement to develop a 2250 megawatt electricity plant at a cost of $2.2bn, plus agricultural complexes and a canal to transfer water in the region.

Further projects include a six square kilometre industrial zone around Egypt’s Suez Canal worth $3.3bn, while others include private sector investments. Egypt is aiming for direct foreign investment of around $8-10bn in 2015-16, and Saudi businessmen are thought to be investing around $4bn in projects acres the country.

In total more than a dozen agreements were signed.

The two nations had already announced plans for a connecting bridge across the Red Sea, and on Saturday King Salman laid the foundation stone of Beouth Islamic City, which includes a dormitory for up to 30,000 students at the renowned Al Azhar University in Cairo.

Egypt also signed development agreements with Saudi Arabia worth $590m, according to Egypt’s International Cooperation Minister, Sahar Naser. She said the agreements covered development in the Sinai peninsula, agriculture, housing and a university, as well as a memorandum of understanding between Saudi Aramco and Egypt’s Arab Petroleum Pipelines Company SUMED.