What is the Ras Al-Hikma project that saved Egypt from being dismantled by the World Bank?

Last Friday, Egypt signed a contract to develop the city of Ras El Hekma on the northern coast in an investment partnership with the United Arab Emirates, in what Prime Minister Mostafa Madbouly described as “the largest foreign direct investment deal in the country’s history.”

Madbouly said in a press conference held after the deal signing ceremony at the Council of Ministers headquarters in the New Administrative Capital, east of Cairo, that the Ras El Hekma deal “will include foreign direct investment worth $35 billion within two months and that this deal takes place within the framework of Egyptian investment laws.”

The Egyptian Prime Minister stressed that the Ras al-Hikma city project is “a partnership and not the sale of assets,” noting that Egypt will receive “35% of the project’s profits,” expecting that the project will achieve monetary stability for the country and contribute to curbing inflation and eliminating the parallel market for the dollar.

The project investments are divided into “two installments, the first of 15 billion within a week and the second of 20 billion. $11 billion will be used, represented by the UAE’s deposits, which will be deducted from the state’s external debt and made available as liquidity for the Central Bank to be used in dealing with the foreign exchange problem.”

The first batch will be $15 billion ($10 billion in liquidity + $5 billion in deposit waivers), and the second will be $20 billion ($14 billion in liquidity + 6 billion in deposit waivers), so the net new dollar input will be $24 billion.

The Abu Dhabi Developmental Holding Company will establish a company called Ras Al Hekma, which will serve as the parent company responsible for developing this project.

The project includes residential neighborhoods for all levels, international hotels of the highest level, tourist resorts and giant entertainment projects, in addition to all the urban services present in every city, including schools, universities, hospitals, administrative and service buildings, in addition to a special service free zone that includes technological industries, light industries, and logistical services. A central financial and business district that attracts international companies.”

The Egyptian government will compensate the people of Marsa Matrouh Governorate who are located on the land allocated for the project, in cash and in kind, indicating that the new city of Ras El Hekma will be built on an area of ​​170.8 million square meters.

In Abu Dhabi, the Emirati Abu Dhabi Holding Company announced the acquisition of the rights to develop the Ras El Hekma project in Egypt for $24 billion, and expected that the project would attract investments worth more than $150 billion.

The company said in a statement that the Egyptian government will retain a 35% stake in the project, adding that work on the project is expected to begin in early 2025.

Ras El Hekma is located on the northern coast, and it belongs to Marsa Matrouh Governorate. Its beaches extend from the Dabaa area at Kilometer 170 on the North West Coast Road to Kilometer 220 in the city of Matrouh. It is famous for the rest house that King Farouk established in the region.

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