Photo courtesy of Egypt's cabinet
The move is within the framework of the State Ownership Policy (SOP) document, which aims to utilize available resources, attract new investments, properly manage, and avoid the exploitation of state assets.
Egypt’s New and Renewable Energy Authority (NREA) and the Egyptian Electricity Transmission Company (EETC) signed agreements earlier this week with Dubai-based energy developer AlcaZar Energy for the investment, operation, and power purchase of the project, with a capacity of 580-megawatt (MW) in the Gulf of Suez, on the Red Sea coast.
The United Arab Emirates has shown significant interest in seizing investment opportunities that Egypt has to offer under its standard operating procedure (SOP) through its Abu Dhabi-based investment holding firm ADQ.
This includes major projects such as Ras El-Hekma, Dana Gas’s $100 million investment programme, acquiring stakes in several Egyptian state-owned oil firms, and container and cargo handling firms.
Madbouly confirmed the project generates other benefits, with land usufruct dues to be paid by the investor, as well as a commitment to upgrade and develop the project’s facility.
This step also aligns with Egypt’s efforts to expand private sector participation in the economy and implement more renewable energy projects as per the national energy strategy. This is to reduce fossil fuel reliance and achieve a 45 percent share of renewable energy in Egypt’s energy mix by 2028, under the National Climate Strategy 2050.
The government has also been working to further reduce its debts, aiming to decrease the debt of budget sector entities to 78 percent of GDP by June 2027, while continuing to bring down external debt by $1–2 billion annually.
Egypt’s real GDP growth is at around 4.9 percent as of the first quarter of 2026 and is expected to slow down due to tighter monetary policies.
The World Bank maintained its expectations for Egypt’s real GDP growth at 4.3 percent for the current fiscal year, FY2025/26, which ends on 30 June, and 4.8 percent for FY2026/27. The IMF has raised its forecast for Egypt’s real GDP growth in FY2025/26 to 4.7 percent.
As of 10 June, Egypt paid its remaining outstanding amount of $440 million worth of dues, fully clearing all outstanding dues owed to foreign partners in the oil and gas sector. This lowers its arrears to zero dollars after they stood at approximately $6.1 billion in June 2024.
Clearing dues owed to international oil companies will improve domestic energy production as more firms are encouraged to trust the country’s investor climate and expand operations in Egypt. It will also reduce import dependence and support Egypt’s current account balance.
As of April 2026, external debt has already declined to approximately $77.5 billion from $78.5 billion.
Egypt’s debt servicing costs, however, continue to consume nearly 76 percent of total revenues during the first 10 months of fiscal year 2025/26, but this is still a decline month-on-month from 81.8 percent during the first nine months of FY2025/26.
Reducing debt, implementing renewable energy projects, and transitioning to a private sector-led economy are important obligations under the country’s International Monetary Fund (IMF)-funded programmes.
The seventh review of the (EFF) programme and the second review under the Resilience and Sustainability Facility (RSF) will conclude in a few days, on 15 June, and should unlock around $1.6 billion in new financing for Egypt.
The IMF has previously said that Egypt’s public debt is projected to decrease over the medium term, despite remaining elevated for now and causing mounting external pressures due to the US-Israeli war on Iran.
Since the start of the war, total outflows from the Egyptian market have been estimated at up to $12 billion so far. The war has also caused uncertainty surrounding the inflation outlook, rising energy prices, and increasing fuel import bills.
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