Saudi Arabia has approved an agreement signed with the Egyptian government regarding investments to be made by the Kingdom’s Public Investments Fund (PIF) in Egypt.
The initial agreement was signed on March 30. Egyptian Prime Minister Moustafa Madbouly took part in the signing ceremony to mark the completion of the deal between the Egyptian government and Saudi Arabia’s PIF. The Saudi Cabinet has now formally approved the agreement.
USD 10 billion in investments
The Cabinet stated that Egypt is seeking to invest USD 10 billion into the country’s economy through Egypt’s Sovereign Wealth Fund and the PIF.
The move comes following Saudi Arabia’s depositing of USD 5 billion with the Egyptian Central Bank. The initial deposit was reported by the media on March 31. The final approval marks the end of a series of meetings between the two countries regarding the nature and means of Saudi’s investments in Egypt. According to a statement the deal should be viewed “in the context of the two countries’ desire to strengthen economic ties and relations between them, based on the directives of the two countries’ leaderships, in order to create conditions for greater opportunities for more investments in Egypt”.
Vital foreign currency
The signing represents the Egyptian government’s attempts to support Saudi Arabian investment and to support the government’s wider aim of increasing inflows of foreign currency. Alongside this, the Egyptian government is seeking to provide opportunities for local labor, to bring contemporary technologies to the country and to bolster trade between Saudi Arabia and Egypt.
Investments in Egypt
The news comes shortly after it was announced that various Gulf states were interested in investing in the Egyptian power sector and at a time when Egypt’s startup environment is surging and attracting record levels of investment, both regional and international.
The PIF is one of the world’s largest sovereign wealth funds and focuses on “long term, opportunistic investments, both domestically and internationally”.