Saudi Arabia and Egypt have signed 17 cooperation agreements, memoranda of understanding and executive programs covering a wide range of fields including electricity, energy, nuclear, trade, industry, housing, and transport, wrote Saudi Gazette. The agreements are worth approximately $1.7 billion, an Egyptian government official told press.
In addition, Egyptian President Abdel Fattah al-Sisi and Saudi King Salman – during his historical visit to Cairo – agreed to set up a $16b Saudi-Egyptian investment fund, Al Arabiya informed.
Further, the two countries also want to build a bridge over the Red Sea to Egypt to connect the Asian and African continents. According to King Salman as quoted by France24, the bridge becomes a “historic step”, which will “connect the two continents, Africa and Asia,” and it is “a qualitative transformation that will increase trade between the two continents to unprecedented levels.”
Moreover, Riyadh and Cairo will seek to settle a long-standing maritime dispute. Deputy Crown Prince Muhammad Bin Salman, second deputy premier and minister of defense, and Egyptian Prime Minister Sherif Ismail signed an arrangement by Cairo to demarcate its maritime borders with Saudi Arabia, officially placing two islands in the Straits of Tiran – named Tiran and Sanafir – in Saudi territory.
In the context of King Salman’s visit to Egypt, it was also reported that Egypt’s Minister of International Cooperation, Sahar Nasr and Saudi Finance Minister, Ibrahim al-Assaf, announced the signing of an agreement for $100m worth of funding for the West Cairo Power Station project. The $700m station is set to open in 2019, jointly funded by the National Bank of Egypt, the Kuwait Fund, the Arab Fund, and the Islamic Development Bank, as well as the Saudi Finance Ministry, wrote Egypt Independent.
Additionally, the head of the Egyptian Atomic Energy Authority, Atef Abdel Hameed, signed an agreement with Hashim Abdullah Yamani, president of the King Abdullah City for Atomic and Renewable Energy in Riyadh, concerning the peaceful use of nuclear power.
Lastly, Egypt’s Ministry of Electricity and Renewable Energy announced that it has also signed three agreements with the Saudi kingdom.
Saudi Arabia is among Egypt’s top investors with an estimated $27b. Their trade exchange reached $4.9b last year, as Saudi Gazette informed, while the total volume of trade exchange amounted to $6.35b, according to Saudi-Egyptian Business Council Deputy Chairperson Abdullah bin Mahfouz quoted by Daily News Egypt.
In the wake of the investment agreements, Reuters reported that Saudi Arabia’s financial support for strategic ally Egypt will no longer involve “free money” and will increasingly take the form of loans that provide returns to help it grapple with low oil prices, a Saudi businessman familiar with the matter was quoted as saying. “This is a change in strategy. Return on investment is important to Saudi Arabia as it diversifies sources of revenue,” the businessman told Reuters.
As Egypt Oil&Gas wrote in an analysis in March, the Saudi funding to Egypt may become a double-edged sword.