Minister of Investment Ashraf Salman said the Egyptian-Saudi Coordinating Committee, headed by the Egyptian Prime Minister Sherif Ismail and an official representative of Saudi Arabia, will hold the second of its meetings on 5 January. The meeting will discuss activating the Saudi King’s initiative to inject about $8bn worth of investments into the Egyptian market, in addition to negotiating Egypt’s needs of petroleum products.
Saudi Arabia has been a strong supporter of the ruling regime in Egypt since the ouster of the Muslim Brotherhood led government on 3 June 2014.
Saudi Arabia provided about $2bn in support of Egypt’s foreign exchange reserves during the Sharm El-Sheikh economic summit in March, in addition to allocating another $2bn for development projects.
“Egypt will pull a slice of those investments during the first quarter of 2016,” Salman said, noting that the Saudi money is ready, pending the studies for the Egyptian projects. He added that Egypt has offered a package of initial studies for several projects, but the Saudi side expressed interest in the agriculture, housing, tourism and energy sectors.
“We are currently scrutinising these projects through following up on the status of lands and their permits with the concerned ministries,” Salman added.
The minister noted that these investments will be implemented using Saudi sovereign funds after conducting studies to assess the future projects’ economic feasibility.
Saudi Arabia, the world’s largest oil producer, announced Tuesday its new budget, which included a large deficit estimated at SAR 326bn, influenced by the sharp fall of oil prices. However, government sources said that Saudi support to Egypt will not be suspended.
There has been speculation suggesting that Saudi Arabia’s financial support to Egypt comes as a result of its agreement to join the Islamic military force formed by Saudi Arabia to combat terrorism. However, sources at the government have refuted these claims, and said the Saudi support began before the formation of the force.
The Islamic military alliance includes Qatar, Turkey, Egypt and Saudi Arabia.
Moreover, Salman said new round of Saudi investments are contingent only upon the preparedness of the Egyptian projects, noting that there is no implementation timeline.
“It is too early to discuss [the timeline],” he noted. “The first phase of projects will be discussed in January, and will be followed by the establishment of the companies that will execute the projects and the form of the contribution.”
According to the minister, the government agreed with Saudi Arabia to activate the $2bn worth investment pledged by the Kingdom during the Sharm el-Sheikh summit. The minister noted that those investments were conditional on the implementation of development projects to serve citizens, such as housing, sanitation and water desalination projects.