This latest infusion brings the total secured funds from the project to $15 billion within just a week, revitalizing an Egyptian economy grappling with a foreign currency shortage.

The $15 billion payment consists of $10 billion of fresh inflows, and $5 billion transferred from UAE deposits at the Central Bank of Egypt (CBE) in Egyptian pounds, according to the statement.

As per a previous statement by the cabinet, the total sum – including the remaining $20 billion due within two months – will be retained by the CBE. 

The CBE will provide an equivalent amount in Egyptian pounds to fund the project as per the deal announced last week.

The investment deal focuses on developing the Ras El Hekma area on the North Coast and injecting much-needed foreign currency into the economy. 

This $35 billion investment marks the largest foreign direct investment (FDI) in Egypt's history.

The deal would allow Egypt to retain a 35 percent stake in the project.

The project “serves as a model for future investment partnerships that can bring substantial revenues,” Prime Minister Mostafa Madbouly said in a Cabinet meeting on Thursday.

Such projects, he added, target attracting foreign currency investments over several years, generating substantial tax revenues, and creating millions of jobs.

All terms of the Ras El Hekma project adhere to Egyptian laws, Madbouly asserted, refuting claims that the country’s sovereignty would be compromised by the deal.

The Cabinet asserts that the deal, signed by Egypt's New Urban Communities Authority and the Abu Dhabi Development Holding Company, will help alleviate the country's current shortage of hard currency.

Madbouly said the project is expected to attract further a minimum of $150 billion during the implementation phases.

The 40,600-feddan project will accommodate residential districts, international hotels, tourist resorts, entertainment venues, and service facilities such as hospitals, schools, and universities.

It will also feature a free economic zone, a central business district, a large marina for tourist yachts, and an international airport.

Egypt expects the mega project to draw an additional eight million tourists yearly. 

The country, which relies on the tourism sector as a main source of foreign currency, eyes attracting 30 million tourists by 2028, compared to 14.9 million tourists in 2023.

Addressing USD Shortage

In recent years, Egypt has undertaken measures seeking to “optimize the utilization of investment assets” amid the foreign currency shortage, particularly since the Ukraine war.

In recent years, Egypt has undertaken measures seeking to “optimize the utilization of investment assets” amid the foreign currency shortage, the latest of which was an $800 million hotel acquisition deal.

The Egyptian government has received an initial tranche of $520 million under the deal, which entails Talaat Mostafa Group, a leading private real estate developer, acquiring a majority equity stake of 51 percent in seven state-owned hotels.

Since March 2022, Egypt has applied three waves of devaluation of its local currency and is currently fighting a surging dollar rate in the informal market.

Devaluations have resulted in the pound losing over 70 percent of its value against the US dollar and leading to significant price hikes for commodities.

The foreign currency shortage has raised concerns about Egypt's ability to meet its monetary obligations requiring foreign currency. 

The Cabinet, however, has repeatedly affirmed the state is capable of meeting such commitments

As of December, the CBE data revealed that Egypt is due to pay $32.79 billion in debt service in 2024. The country's total debt reached $164.73 billion by the end of June.

On Tuesday, the International Monetary Fund said it anticipates finalizing a deal with Egypt on an augmented financing package within weeks.

IMF Managing Director Kristalina Georgieva told Reuters that key issues with Egyptian authorities regarding a review of the country's $3 billion loan program have been resolved.