The Madbouly government has inked a USD 35 bn agreement with ADQ, giving the Abu Dhabi wealth fund and longtime investor in Egypt the development rights to Ras El Hekma on the North Coast, according to separate statements from the cabinet and ADQ (pdf). This marks the “largest direct investment agreement in Egypt,” Prime Minister Moustafa Madbouly said.

ADQ is paying USD 24 bn for the development rights to Ras El Hekma and will convert some USD 11 bn worth of UAE deposits at the Central Bank of Egypt into money that it will “invest … in real estate and other prime projects,” the fund said in its press release.

To put that into perspective: The agreement is worth 3.5x the value of all foreign investment Egypt attracted last year.

A next-generation city: A 170-mn sqm stretch of prime coastal land will be transformed into a “next-generation city,” housing tourism, urban, commercial, and recreational spaces, alongside a freezone and an investment zone. The area will also feature a marina for yachts and will have an airport nearby. ADQ will break ground on the project in early 2025 and it is expected to attract 8 mn additional tourists into the country every year when it is up and running.

The city could be a game-changer for the North Coast, extending more than 50km along the sea from Dabaa to Matrouh and transforming it into a year-round residential, tourism, and business hub. When ADQ says it will aim to build something “world class” — the adjective it’s using here — it delivers.

ADQ “aims to unlock the appeal of Ras El-Hekma as a premium international financial and tourism destination, adopting the latest cutting edge digital and technological smart city solutions,” it said.

USD 15 BN WITHIN A WEEK-

The state’s coffers will see a near-immediate influx of capital:

  • ADQ will make a USD 15 bn payment within a week — USD 10 bn of which will be fresh inflows and USD 5 bn in the form of a previous UAE deposit at the Central Bank of Egypt.
  • The remaining USD 20 bn is due within two months — USD 14 bn in fresh funds and USD 6 bn in existing deposits.

There’s plenty of upside for the state: The government will net 35% of the revenues from Ras El Hekma when it starts operating.

Our own gigaproject: ADQ thinks Ras El Hekma will attract investment worth c. USD 150 bn as it is built out, and it looks like that could be just in phase one. New Urban Communities Authority Vice Chairman Walid Abbas told talk show host Ahmed Moussa that investment is likely to top USD 500 bn over 15 years and three phases.

Phase one will take about 5 years to complete, and NUCA sees Ras El Hekma creating some 8 mn jobs in the first phase alone (watch, runtime: 40:34).

Who will carry out the development? ADQ will set up an Egyptian joint stock company named Ras El Hekma to handle the project’s development.

ADVISORS- Baker McKenzie provided counsel for the Egyptian government, while Matouk Bassiouny & Hennawy was the legal advisor to ADQ, according to Al Borsa.

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