Egypt said to offer Saudi Arabia projects in housing, tourism

The Egyptian government offered tourism and housing projects to Saudi Arabian funds, a government official said, as part of planned investments by the kingdom to help Egypt’s dollar-starved economy.

The government offered tourism projects in the Red Sea resort of Sharm El-Sheikh, as well as a mixed-use real-estate project west of Cairo on a partnership basis, said the official, who asked not to be named because the details aren’t public. The Saudi funds are studying the proposed projects, the official said.

The kingdom agreed this month to invest 30 billion riyals ($8 billion) in Egypt through its public and sovereign funds and is set to renew a deal to provide oil products to Egypt for 5 years on favorable terms. It may also buy Egyptian local debt instead of depositing dollars in the central bank.

The promise of funds suggests Saudi Arabia remains committed to supporting Egypt even as plunging oil prices and the war in Yemen strain the kingdom’s public finances. Egypt’s foreign-currency shortage caused business activity to contract the most in more than two years in November, according to the Emirates NBD Purchasing Managers Index.

Saudi Arabia, the United Arab Emirates and Kuwait have extended tens of billions of dollars in aid to Egypt since the 2013 overthrow of Islamist President Mohamed Mursi.

The government official said Saudi funds were also interested in energy and agriculture projects. Talks between Egyptian and Saudi officials are set to continue in Riyadh on Jan. 5, Egyptian Prime Minister Sherif Ismail told reporters earlier this month.

 – Bloomberg [With assistance from Abdel Latif Wahba].