Egypt secured billions of dollars in investment commitments, with Gulf Arab investors playing a key role on the second day of a conference billed by the government as a milestone in efforts to revive the struggling economy.
The government and investors from the Gulf Cooperation Council announced initial deals in industries from energy to logistics and construction on Saturday, a day after Saudi Arabia, the United Arab Emirates, Kuwait and Oman pledged more than $12 billion in assistance.
The funds maintain the status of GCC nations as Egypt’s main financial backers after the ouster of Islamist President Mohamed Mursi in 2013, supporting a government that shares their hostility to political Islam. The bulk of investment announcements from the Gulf and beyond came from companies and investors with a presence in the most populous Arab country such as BG Group Plc and Italy’s Eni SpA.
“We must all stand by Egypt today, because Egypt’s security and stability is the region’s security and stability,” Sultan Al Jaber, the U.A.E. minister overseeing his country’s aid to Egypt, told the conference on Saturday in the Red Sea resort of Sharm El-Sheikh.
The event comes at a critical time for Egypt, with security forces struggling to stop militant attacks in northern Sinai. Bomb attacks in Cairo and other provinces have become a daily occurrence in the past two weeks.
Distress Signals:
The $300 billion economy has been growing at the slowest pace for two decades, and signs of recovery in the second half of 2014 have given way to renewed distress signals from recent data. The benchmark stock index reached a six-year high in early February, and has since dropped about 4 percent.
Masdar, an Abu Dhabi-based company, and Saudi Arabia’s ACWA Power signed memorandums of understanding with the Egyptian government to build power stations valued at $15 billion. Alsudain Group, another U.A.E. company, signed two agreements valued at $6 billion to develop a wheat logistics hub in Damietta and a logistics and shopping zone in Ain El-Sokhna on the Red Sea.
Beyti, a joint venture between Saudi Arabia’s Almarai Co. and PepsiCo Inc., is weighing an acquisition of confectioner Rashidi El-Mizan and packaged milk producer Dina Farms, two units of Egypt’s Qalaa Holdings, Chief Executive Officer Mohamed Badran said in an interview.
The new Gulf aid will “send a very positive message about the economy,” said Omar El-Shenety, managing director at Cairo-based investment bank Multiples Group. It’s “different than previous pledges in that a good part of it is coming in the form of investments, not just deposits.”
