Egypt Inks $35B Deal With ADQ To Develop Ras El-Hikma

February 25, 2024


Egypt signed a $35 billion investment partnership agreement with the Abu Dhabi Developmental Holding Company ADQ on Friday to develop Ras El Hikma’s coastal zone, located west of Alexandria.

Ras El Hekma development

Ras El-Hekma, located about 350 kilometers northwest of Cairo and spanning over 170 million square meters, is slated to become a premier destination in the Mediterranean, boasting unparalleled attractions such as hotels, yacht marinas, and entertainment facilities, Prime Minister Mostafa Madbouly announced in a press conference on Friday.

Under the agreement, ADQ will acquire the development rights for Ras El-Hekma for $24 billion, aiming to transform the region into one of the largest new city developments through a private consortium that includes Talaat Mostafa and Modon Properties.

The project will commence in 2025, Madbouly said, adding that ADQ will convert $11 billion of its deposits at the Central Bank of Egypt into investments in key projects across the country, further supporting economic growth and development.

The development project will encompass the construction of a free zone and an investment zone, featuring residential, commercial, and recreational spaces with seamless domestic and international connectivity. Egypt will retain 35% of the development project’s revenues, ADQ said in a statement on the same day.

According to the terms of the deal, ADQ will provide Egypt with a total $35 billion in advance over two tranches within two months. Madbouly noted that this amount will help the country navigate the lack of hard currency and will also end the issue of the double rates for the US dollar in the local market.

Economic benefits

Madbouly emphasized that the Ras El-Hikma development project represents the largest foreign direct investment (FDI) deal in Egypt’s history. He underscored that the project will create hundreds of job opportunities, enhance Egypt’s appeal as a unique tourist destination, and attract more FDIs.

Madbouly also announced during the signing ceremony that the government will unveil several similar projects soon.

ADQ stated, “The significant investment marks a pivotal step towards establishing Ras El-Hekma as a leading first-of-its-kind Mediterranean holiday destination, financial center, and free zone equipped with world-class infrastructure to strengthen Egypt’s economic and tourism growth potential.”

The UAE holding company said that its decision to invest in Ras El-Hekma is marked by its extensive track record of smart-growth planning and investing in similar large-scale infrastructure and development projects in the region. It also highlighted that its experience in providing fully integrated infrastructure solutions across a broad range of services, including energy, water, transportation, and real estate, promises to pave the way for significant benefits to the new development and Egypt’s economy, expecting this project to attract over $150 billion in investments into the country.

“ADQ is a long-standing investment partner in Egypt, and we have demonstrated our ability to select opportunities that are aligned with our investment framework and benefit the Egyptian economy,” said Mohamed Hassan Alsuwaidi, Managing Director and CEO of ADQ.