Prime Minister Moustafa Madbouly’s meeting with Crown Prince Mohammed bin Salman ends with investment announcement: Saudi Crown Prince Mohammed bin Salman announced that he has directed Saudi’s Public Investment Fund (PIF) to pump USD 5 bn in investments into Egypt as part of the “first phase” of a larger program of investment, according to a cabinet statement. A timeline of when we can expect to see the funds or what areas they will target were not disclosed.

We’ve been on the look out for news like this for a while: Saudi Arabia is looking to turn its deposits with the Central Bank of Egypt into investments, Saudi investment Minister Khalid Al Falih first told Prime Minister Moustafa Madbouly in August. Saudi Arabia is the second largest contributing nation to our long-term deposits, making up USD 5.3 bn of the USD 15.0 bn long-term deposits currently sitting at the central bank as of March 2024, according to the Central Bank of Egypt’s most recent data set. Yesterday’s statement did not confirm whether this is how the USD 5 bn from the PIF will be funded.

Remember: Madbouly touched down in Riyadh yesterday alongside Finance Minister Ahmed Kouchouk and Investment Minister Hassan El Khatib for talks with their Saudi counterparts aimed at strengthening trade and investment between the two countries.

The PIF is no stranger to Egypt: The sovereign fund’s most recent moves in the country saw it join up with CIRA Education’s majority shareholder in May to acquire up to 100% of the company. A little later on in the month, the fund — which ranked as the world’s highest-spending sovereign wealth fund in 2023 — began negotiations to acquire a minority stake in local agriculture firm Daltex. In 2022 alone, the PIF through its Saudi Egyptian Investment Company invested over USD 1.3 bn via SEIC to acquire stakes in state-held EGX-listed companies. Its holdings here include a 25% stake in Mopco, a 19.82% stake in Abu Qir Fertilizers, a 27% stake in E-finance, and a 20% stake in Alexandria Container and Cargo Handling.

Madbouly was keen to signal that Egypt is ready for business: In his meeting with bin Salman, and in an earlier speech to private sector players, Madbouly noted that the majority of the approximately 90 problems identified by Saudi investors have already been sorted out. The 14 remaining issues will be solved by the end of the year, Madbouly added.

A bilateral investment agreement to push everything along will also soon be in place: The Agreement on Promotion and Mutual Protection of Investments between the two countries, which aims to help protect Saudi investors as Egypt looks to double their investments in the country, will be put into effect in two months or less after both sides sort out the necessary legislative and regulatory issues.

As will a coordination council currently in the works: The crown prince said he wants to hold the first meeting of a coordination council between the two sides in October.

Saudi-Egyptian investment isn’t just a one-way street: There are now over 5.7k Egyptian companies investing in the Saudi market, according to the prime minister.

The story also got ink in the international press: Reuters | Bloomberg

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