Saudi Arabia Proposes Red Sea Territory Acquisition Using Reserve Funds, Targeting Egyptian Premium Region (Ras Ghamila)
Saudi Arabia Makes Offer to Acquire Egyptian Tourist Destination, Ras Ghamila
Looks like Saudi Arabia has proposed to buy the beautiful Red Sea tourist haven, Ras Ghamila, to boost their tourism sector and strengthen economic ties with Egypt. According to sources inside Egypt's Ministry of Public Business Sector, the kingdom is also considering pulling its $10.3 billion deposits from Egypt's Central Bank as part of the deal.
The Saudi offer comes as the Egyptian government struggles with its currency crisis and seeks foreign investment to shore up its economy. The proposed deal echoes the successful $35 billion Emirati acquisition of the Ras el-Hekma area, which included $11 billion of existing deposits.
Ras Ghamila, a popular diving spot, sits approximately 11.5 km from Sharm el-Sheikh airport in South Sinai governorate and opposite Tiran Island. It's a strategic location that could help connect Sharm el-Sheikh and Neom in Saudi Arabia, making it a tantalizing prospect for Saudi investors.
The restructuring of Egypt's economy has been underway since 2018, with the government selling off public assets to Gulf states. Egypt's high debt levels, mainly from spending on megaprojects and weapons deals, have driven up foreign debt to $168 billion.
If the Ras Ghamila deal materializes, Saudi Arabia is reportedly interested in acquiring more than just the tourist destination. The proposed deal includes the acquisition of at least six other public Egyptian companies, including National Company for Natural Water in Siwa (SAFI), Wataniya Petroleum, and Egypt's largest private education company, CIRA Education.
CIRA Education announced it was open to an acquisition deal with the Saudi Egyptian Investment Company, which represents the Saudi Public Investment Fund spearheading negotiations. MEE contacted the SPIF for comment but received no response at the time of publication.
Sources anticipate that other Gulf countries may follow a similar pattern, linking acquisitions of strategic areas with deposits. Independent Egyptian news site Manassa reported on Saturday that ten publicly-owned companies would go public, including the Siemens power plant in Beni Suef, four water desalination plants, and two wind power plants in the Jabal al-Zeit and Zafarana regions.
Egypt's military has been a significant player in this ongoing saga, with allies depositing a total of near $30 billion in the Central Bank of Egypt since the 2013 military coup, led by current president, Abdel Fattah el-Sisi. Saudi Arabia has contributed about $10.3 billion to this tally, with the UAE and Qatar contributing approximately $10.7 billion and $4 billion, respectively. Libya has added around $900 million.
This potential deal could offer more than just a financial boost to Egypt, potentially enhancing tourism infrastructure, generating foreign direct investment, and addressing currency instability. It could also strengthen relations with Saudi Arabia, paving the way for further economic cooperation between the two nations.
- The proposed deal for Saudi Arabia to acquire Ras Ghamila in Egypt could lead to a significant financial boost, potentially addressing Egypt's currency instability and enhancing tourism infrastructure.
- If the Ras Ghamila deal goes through, it is rumored that Saudi Arabia is interested in acquiring more than just the tourist destination, possibly gaining ownership of at least six other public Egyptian companies.
- CIRA Education, Egypt's largest private education company, has shown openness to an acquisition deal with the Saudi Egyptian Investment Company, representing the Saudi Public Investment Fund leading negotiations.
- Independent Egyptian news site Manassa reported that ten publicly-owned companies, including the Siemens power plant in Beni Suef, several water desalination plants, and wind power plants in Jabal al-Zeit and Zafarana regions, are set to go public.
- The Middle Eastern news landscape has been active with the news of Saudi Arabia's offer to buy Ras Ghamila, which could strengthen economic ties between Saudi Arabia and Egypt, as well as pave the way for further economic cooperation.
- The restructuring of Egypt's economy through asset sales to Gulf states is not a new phenomenon, with the government selling off public assets to combat high debt levels, mainly from megaprojects and weapons deals.
- The ongoing saga of Egypt's economic restructuring has seen significant investments from Gulf states, with the Central Bank of Egypt holding nearly $30 billion in deposits from allies like Saudi Arabia, the UAE, Qatar, and Libya.
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