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The New Arab

Saudi King visits Cairo to sign billion-dollar development deals

Egypt is struggling to revive an economy which unravelled following the 2011 uprising [Getty]

Date of publication: 7 April, 2016

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The Saudi King will arrive in Egypt on Thursday for a state visit that is expected to include signing a number of investment deals and discussing regional and diplomatic issues.
Saudi Arabia's King Salman is set to arrive in Cairo for a rare five-day visit to the economically struggling North African state, which is expected to come with a number of investment and financing agreements.

Salman is expected to sign 14 deals with the Egyptian government, including a $1.5 billion deal to develop its Sinai region as well as agreements on the maritime borders between the two countries and connecting their electricity grids, sources have told The New Arab.

Egyptian officials have also said Saudi Arabia will sign a $20 billion deal to finance Egypt's petroleum needs for the next five years.

"The Saudi support to Egypt will significantly help the failing Egyptian economy but it won't be for free. Egypt will be granted flexible payments and interest loans," the head of the Saudi Shoura Council's economic and energy committee, Abdel Rahman al-Rashed, said.

"Investing in Egypt is extremely risky given the Egyptian pound's devaluation against the US dollar. It's not strange, however, that Saudi Arabia is continuing to invest in Egypt because it already has lots of invested capital in Egyptian industry, commerce and even agriculture," Rashed told The New Arab.

Separately, the deputy head of the Saudi-Egyptian Business Council said on Tuesday that Saudi businessmen will invest a total of $4 billion in projects including the Suez Canal, energy and agriculture, and had already deposited ten percent of that sum in Egyptian banks.

Saudi financial analyst Rabie Sindi agreed: "This substantial aid package to Egypt will be the last chance for the Egyptian economy to rebound from collapse."
Analysts have also said Saudi Arabia will try to change the Egyptian stance on disputed issues, including Syria, Yemen and Iran, during the visit.
"Saudi Arabia believes it is its duty to back Egypt as well as other Arab states," Sindi told The New Arab.

Analysts have also said Saudi Arabia will try to change the Egyptian stance on disputed issues, including Syria, Yemen and Iran, during the visit.

"The visit comes as Saudi Arabia is asserting itself as leader of the Arab and Islamic states. King Salman will attempt to convince Egyptian President Abdel Fattah al-Sisi to turn the page on ongoing disputes with Qatar and Turkey and make a fresh start on cooperation with them," diplomatic sources told The New Arab's Arabic service.​

Saudi Arabia, along with other oil-rich Gulf states, has pumped billions of dollars into Egypt's flagging economy since the army toppled President Mohamed Morsi of the Muslim Brotherhood in 2013 after mass protests against his rule.

Gulf Arab countries see the Muslim Brotherhood as a threat.

Egypt is struggling to revive an economy which unravelled following a mass uprising that toppled President Hosni Mubarak in 2011.

Last week, Saudi Arabia announced it was preparing itself for the twilight of the oil age with a $2 trillion "megafund" that would be the world's largest sovereign wealth fund of its kind.

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