Gulf investment in Egypt: reshaping partnerships, reform, and economic ambition

StratPlanTeam
Jun 1
5 min read

Updated: Jul 6

A new wave of Gulf support for Egypt

Egypt’s economy has long relied on international support during times of stress. But in 2024 and 2025, the scale and form of that support shifted dramatically. Gulf states—especially the United Arab Emirates (UAE) and Saudi Arabia—have stepped forward not just with loans or aid, but with large, strategic investments.

This new approach blends economic opportunity with geopolitical influence. It comes as Egypt faces one of its most serious financial challenges in decades, with rising debt, inflation, and pressure on its currency. Gulf capital is now a key part of Egypt’s effort to rebuild confidence, attract private investment, and reset its long-term growth path.

This article offers an overview of these developments, focusing on the scale of Gulf investment, the types of projects involved, and how they are linked to wider reforms and economic goals.

The Ras El Hekma deal: a turning point for Egypt’s finances

In February 2024, the UAE announced a record-setting $35 billion investment in Egypt. This became the country’s largest foreign direct investment agreement to date and marked a turning point for its financial outlook.

The deal was centred on the rights to develop Ras El Hekma, a coastal peninsula west of Alexandria. It included:

$24 billion in fresh foreign exchange for Egypt
Conversion of $11 billion in UAE central bank deposits into Egyptian pounds
A long-term development plan for a new tourist city with an airport, resorts, residential areas, and business zones

Work on the Ras El Hekma project is due to begin in 2025. In time, it is expected to attract as much as $150 billion in wider investment and generate employment and revenues for both Egypt and the UAE’s ADQ fund, the deal’s lead investor.

This injection of foreign currency provided a timely boost to Egypt’s reserves and public finances. It also gave the government enough confidence to liberalise the pound in March 2024, letting the currency float freely for the first time in years.

Unlocking reforms, unlocking support

Following the currency reform and Ras El Hekma deal, the International Monetary Fund (IMF) resumed its Extended Fund Facility agreement with Egypt, expanding the programme from $3 billion to $8 billion. Additional support followed from other multilateral institutions, including:

$8 billion from the European Union
$6 billion from the World Bank

Egypt’s primary fiscal surplus for the year ending June 2025 rose to $18 billion, or about 6% of GDP. Inflation began to decline steadily, reaching 26% in July 2025, down from much higher levels earlier in the year. Foreign exchange reserves hit a record $46 billion, up by nearly one-third since February.

These improvements signalled renewed confidence in Egypt’s ability to stabilise its economy and attract private capital.

The UAE interest beyond Ras El Hekma

The UAE had already been an active investor in Egypt before the Ras El Hekma announcement. In 2023, Abu Dhabi’s ADQ committed $800 million to acquire stakes in three Egyptian industrial companies. Another UAE investment group bought a $625 million share in Eastern Tobacco.

Although discussions also took place with Qatar and Saudi Arabia at the time, those deals did not close—partly due to expectations of an upcoming devaluation, which investors believed would affect asset pricing.

The February 2024 agreement changed the tone of Egypt’s investment climate. The scale of UAE involvement demonstrated a strategic commitment and provided confidence to other partners. It also gave the government space to press ahead with deeper economic reforms.

Saudi Arabia returns with $5 billion commitment

In early 2025, Egypt’s cabinet confirmed that Saudi Arabia would invest $5 billion into its economy. While not as large as the UAE’s commitment, it was a significant gesture—particularly since economic ties between Cairo and Riyadh had slowed after 2022, when Saudi Arabia shifted away from unconditional financial support.

The new investment, led by Saudi Arabia’s Public Investment Fund (PIF), is described as a “first stage”. Specific projects are yet to be confirmed, but the funds will support agreed areas of development. This move aligns with Saudi Arabia’s efforts to diversify its economy and build stronger commercial ties across the region.

Some observers view this as part of a broader economic rivalry with the UAE, particularly around Red Sea development and regional influence. As Saudi Arabia pushes ahead with its NEOM project on its own Red Sea coast, investing in Egypt’s neighbouring shores may form part of a strategic balancing effort.

Widening scope: Gulf involvement in Egyptian infrastructure

Gulf-backed investment in Egypt is not limited to tourism and real estate. The UAE’s AD Ports Group recently signed a long-term agreement to develop the KEZAD East Port Said Industrial and Logistics Zone. The 50-year renewable contract covers a 20 km² area near the Suez Canal, with $120 million allocated in its first phase.

This deal expands on the UAE’s existing presence in Egypt’s port infrastructure. For example:

DP World owns 90% of Ain Sokhna Port
The UAE holds significant stakes in Alexandria Port and Suez Canal Authority projects

The strategic importance of these investments is clear. Egypt’s ports sit at the crossroads of Europe, Africa, and Asia, and control of key logistics hubs carries both economic and geopolitical value.

Reforming Egypt’s investment approach

Egypt has made clear its intention to encourage private sector involvement. It has set a cap on public investment spending—EGP 1 trillion ($20 billion)—to make more room for private capital in future budgets.

In the 2025–2026 fiscal year, the government expects a record EGP 3.5 trillion ($72 billion) in total investment:

Private sector to contribute EGP 1.94 trillion ($40 billion), or 63%
Public sector to contribute EGP 1.56 trillion ($32 billion), or 37%

This is a shift from previous years, when public investment dominated. Government policies, including reforms supported by the IMF, have encouraged more local and foreign firms to step in. According to Planning Minister Rania Al-Mashat, credit to the private sector has already increased in early 2025.

Although public investment still grew by 6.3% in 2023–2024, it remained below the new ceiling—signalling that the shift is intentional and supported at the highest levels.

A new era of investment and partnership

The past two years have seen a major rebalancing of Egypt’s investment landscape. Gulf countries, led by the UAE and Saudi Arabia, are now among the most active players in Egypt’s economic future. These new partnerships go beyond short-term support and reflect long-term strategic thinking.

At the same time, Egypt is using this momentum to advance economic reforms, restore market confidence, and create space for private enterprise. The scale of recent deals—such as Ras El Hekma—shows how foreign investment can be a catalyst for broader change, if supported by consistent policy and planning.

While the challenges ahead are still significant, Egypt’s new investment partnerships suggest that the country is finding new ways to navigate global pressures, regional competition, and its own development goals.