A major development project deal was signed on the afternoon of 23 February 2024 between Egypt and the United Arab Emirates to develop the town of Ras al-Hekma on Egypt’s Mediterranean coast, some 170km west of Alexandria.
The Egyptian-Emirati partnership deal will transform the coastal city of Ras al-Hekma into a global tourist destination built on an area of 40,600 feddans [1 feddan = 4,200sq.m] that will include an international airport, residential developments, tourist resorts, hotels, commercial centres, entertainment venues, and service facilities such as hospitals, schools and universities. It will also feature administrative and service buildings, a free economic zone for information technology industries and logistics hubs, and a central business district that would attract global companies.
The project will also include a large marina for tourist yachts and ships.
Prime Minister Mostafa Madbouly attended the signing ceremony. The agreement was signed by Egypt’s Minister of Housing Assem al-Gazzar and UAE’s Minister of Investment Mohamed Alsuwaidi at Egypt’s New Administrative Capital.
The project will be implemented by the Egyptian New Urban Communities Authority and the Abu Dhabi Development Holding Company owned by the government of Abu Dhabi. The Abu Dhabi Development Holding Company will establish an Egyptian joint-stock company named Ras al-Hekma to implement the mega project, PM Madbouly said.
The Cabinet had approved the agreement which was described as ‘historic’. It was termed the largest ever foreign direct investment (FDI) in Egypt, through partnership with major entities. PM Madbouly said the deal answers the need of Egypt to attract FDI and to increase the country’s hard currency resources, also to achieve objectives of urban development.
The deal, the Prime Minister said, signals a beginning to other FDI development agreements envisaged by the government. He said the new project will pump USD35 billion in foreign investment into the Egyptian economy within two months, the largest FDI sum in the history of Egypt. This should help the country override its severe hard currency shortage, he said.
Emirati investments throughout the implementation of the project, are expected to reach a minimum of USD150 billion, PM Madbouly explained.
The Prime Minister explained that Egypt will be getting 35 per cent of the project’s revenues, and that the UAE will waive its USD11 billion in foreign deposits at the Central Bank of Egypt.
Ras al-Hekma is an idyllic site of turquoise blue waters and soft white sands. The new development project aims at establishing a sustainable eco-friendly smart city in harmony with the local environment and community.
The new town is expected to attract some 8 million tourists a year, PM Madbouly said, and provide millions of job opportunities. Egyptian contractors, real estate developers, logistics companies, and local factories will be involved in the project’s development and operation.
Local residents who might be in any way impacted by the new project will be adequately compensated, the Prime Minister said, financially or in-kind.
According to PM Madbouly, the Ras al-Hekma project is part of a broader strategy to develop Egypt’s western North Coast Mediterranean region by building fully integrated urban communities, to counter the current seasonal beach resorts that dot the coast. The new developments should accommodate a large portion of Egypt’s expected population growth, the PM said, and should help achieve the target 40-50 million tourists a year Egypt hopes to attract. They stand to benefit from the huge road and rail infrastructure projects—including the highspeed train that connects Egypt’s Red Sea eastern region with the northwest coast on to the border town of Salloum—that seamlessly link the North Coast to other places in Egypt.