Egypt, Saudi Arabia Strengthen Economic Relations
Egypt and Saudi Arabia are on the brink of signing a significant investment protection agreement. This move marks a pivotal moment in their bilateral relations.
Agreement’s Core Elements
Egypt’s Trade and Industry Minister, Ahmed Samir, recently announced the imminent finalization of an investment protection agreement with Saudi Arabia. Significantly, this deal is designed to ensure fair and equitable investments for both countries.
Additionally, it will streamline the procedures involved in establishing, expanding, and maintaining investments, thereby simplifying the investment process.
Moreover, it guarantees investment safety during wars and emergencies, and shields them from nationalization or ownership changes.
Economic Implications
This agreement underscores Saudi Arabia’s pledge to invest approximately $8 billion across diverse Egyptian sectors. Specifically, these sectors encompass petroleum, renewable energy, green hydrogen, information technology, e-commerce, pharmaceuticals, infrastructure, and cybersecurity.
Focusing on key projects, this partnership includes:
- A notable $3.3 billion venture by Saudi Ajlan & Bros Holding Co. and the Egyptian Arab Supply Chain Group Co., aiming to develop the Egypt Center for Petroleum and Petroleum Products Storage.
- A significant initiative by ACWA Power and the Egyptian Electricity Holding, targeting the generation of 1,100 megawatts of clean energy, with an estimated cost of around $1.3 billion.
- Renewable energy and water desalination projects, collectively valued at roughly $1 billion, undertaken by Ajlan & Bros Holding Co. and the Egyptian Sami Saad Holding Group.
- An investment of less than $500 million in the real estate and food industry sectors, a collaborative effort between Ajlan & Bros Holding Co. and Hassan Allam Holding.
Boosting Employment, Trade
These investments are anticipated to create significant economic returns for Egypt, including new companies, factories, and job opportunities.
In 2021, Saudi exports to Egypt amounted to $10 billion. The Egyptian exports to Saudi Arabia stood at around $4 billion.
This trade volume positions Egypt as Saudi Arabia’s largest Arab trading partner.
Furthermore, these investments will pump foreign currency into Egypt, enhancing job creation, sales, service industries, trade exchange, and the value of the Egyptian pound.
The upcoming investment protection agreement between Egypt and Saudi Arabia is a strategic milestone. It does not only strengthen the economic ties between the two nations but also serves as a model for regional cooperation and development.
This agreement is a promising step towards a more integrated and prosperous Middle Eastern region.
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