For weeks, there were rumours, but last week, there was confirmation: The United Arab Emirates (UAE) was buying into an area of pristine coastline west of Alexandria for billions of dollars to develop a huge new resort.
The Abu Dhabi Developmental Holding Company PJSC (ADQ), a sovereign wealth fund, is to pour $35bn into Ras El-Hikma, paying $20bn now and $15bn in a few months, according to Egyptian Prime Minister Mostafa Madbouly.
Across a stretch of turquoise Mediterranean, the Emiratis have bought a slice of paradise with royal pedigree: it once housed the palace of King Farouk I and was later transformed into a presidential retreat.
The Egyptians, now rolling in Emirati cash, have bought time since they can now make some very large and imminent debt repayments.
So, is this a win-win?
A timely investment
The Ras El-Hikma project, in Egypt’s northwest near Alamein, is the country’s largest tourist investment project by quite some distance.
It is also the largest direct investment deal of any kind in the country’s history. Egypt says investments in Ras El-Hikma could rise to $150bn over the next few years.
Its timing is key, as it helps Egypt overcome two pending crises: imminent public debt repayments and a scarcity of dollars, alongside an unprecedented rise in parallel market exchange rates.
Both issues have led to inflation and market disturbances.