On 10 March, the House of Representatives gave the thumbs up to an Egypt-Saudi agreement on the promotion and mutual protection of investments. The agreement had been approved by Saudi Arabia’s cabinet a week earlier .
Final approval of the agreement — it had been in the pipeline since Saudi Crown Prince Mohamed bin Salman’s visit to Cairo last October, during which the Saudi-Egyptian Supreme Coordination Council was established — was welcomed in economic and business circles in both countries. The agreement is expected to boost capital inflows, create jobs, and strengthen economic ties between the two nations.
Head of the House’s Economic Affairs Committee Mohamed Suleiman told Al-Ahram Weekly that Egyptian-Saudi relations are based on solid foundations, extending over decades of close cooperation, and are growing on the back of shared economic interests. The agreement, he said, aims to create favourable conditions and greater opportunities for the exchange of investments between Saudi and Egyptian businesses.
According to a report prepared by the House’s Economic Affairs Committee, the agreement’s protections cover mutual investments between Egypt and Saudi Arabia in which the foreign investor owns at least 50 per cent of the shares of the project and exercises full administrative control. The agreement does not cover dual national investors holding the nationality of the host country, government grants, and subsidies allocated to local projects, commercial contracts related to the sale of goods and services, investment in sovereign debt instruments, real estate used for private residential purposes and Saudi Sovereign Wealth Fund investments.
The agreement prohibits any form of nationalisation or arbitrary confiscation of investments and stipulates that “neither party may take direct or indirect measures that lead to the expropriation of the other party’s investments or negatively affect their value.”
It regulates the repatriation of investors’ profits and funds but allows the host country, in exceptional cases such as economic crises, to delay or restrict capital transfers on a temporary, non-discriminatory basis until economic conditions improve.
Under the agreement, investors may resort to international arbitration to resolve disputes only after exhausting local settlement avenues. Investors are also prohibited from filing parallel arbitration claims before multiple parties regarding the same dispute.
Commenting on the agreement, Saudi Investment Minister Khaled Al-Falih said it reflects a sincere wish from the leadership of both countries to push forward economic and business relations.
Posting on its X account, the Federation of Saudi Chambers (FSC) said approval by the Egyptian parliament is an important step towards enhancing confidence between Egyptian and Saudi investors: “It provides a clearer legal framework for their investments, protects them from legal and political risks, helps create optimal conditions for investment exchange between the two countries [and will result in] an increase in capital flows and investments, provide more job opportunities and strengthen economic relations.”
The FSC noted that Saudi private sector investments in Egypt were estimated at around $35 billion in October 2024 and that both countries are committed to boosting investment and trade exchange in a way that is mutually beneficial.
The agreement aligns with Saudi Arabia’s Vision 2030, an economic diversification strategy that seeks to reduce reliance on oil revenues by increasing non-oil exports and strengthening regional trade alliances.
Bandar Al-Amri, head of the Saudi-Egyptian Business Council, told Al-Arabiya TV that parliamentary approval will be followed by Saudi investors injecting $15 billion into various economic sectors in Egypt, including renewable energy, industry, real estate development, tourism, and technology, bringing the total of Saudi investments in Egypt to $50 billion.
In addition to private sector investments, the Saudi Public Investment Fund, through its subsidiary in Cairo, plans to invest at least $5 billion. According to Al-Amri, “these investments will be in joint-projects with the Egyptian and Saudi private sectors and the Egyptian government.”
During his visit to Riyadh in September 2024, Prime minister Mustafa Madbouli said that the vast majority of problems facing Saudi investments in Egypt have been resolved.
Al-Amri noted that the number of Egyptian companies operating in Saudi Arabia reached 6,830 in 2024, with investments approaching $18.7 billion. They include Egyptian real estate development companies like Talaat Mustafa Group, Hassan Allam, Concrete Plus, and Mountain View, all of which are expected to boost their investments.
The large Egyptian community in the kingdom and increasing number of Saudi visitors to Egypt has led the number of flights between the two countries to increase to more than 630 a week. Al-Amri also highlighted that electrical interconnection between the two countries will be completed before the middle of 2025.
The Economic Affairs Committee report cited increased trade exchange between Egypt and Saudi Arabia, which reached $6.5 billion during the first eight months of 2024, compared to $4.9 billion during the same period in 2023.
In March 2022, Saudi Arabia deposited $5 billion with the Central Bank of Egypt, bringing total deposits from the kingdom to $10.3 billion. The funds helped stabilise Egypt’s foreign exchange reserves after foreign investors’ withdrawals spiked following the war in Ukraine.
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