Egypt and Saudi Arabia signed several agreements during a Sunday meeting in Riyadh, including a US$1.5 billion financing deal for development projects in the Sinai, and an agreement that will see Saudi Arabia finance Egypt’s petroleum needs for five years.
The agreements, announced Sunday by the Ministry of International Cooperation, mark incremental progress in previously announced deals.
In December, Egyptian Prime Minister Sherif Ismail announced Saudi Arabia’s commitment to supporting Egypt’s petroleum needs. A related agreement was signed today by the Saudi Fund for Development, Saudi state-owned petroleum company Aramco and the Egyptian General Petroleum Corporation.
Support for the Sinai Peninsula development project has been anticipated since January, when Minister of International Cooperation Sahar Nasr announced negotiations with Saudi Arabia, as well as other regional funders. According to Nasr, Sunday’s meeting saw the Saudi Development Fund sign an agreement that will see it contribute $1.5 billion toward the financing of the Sinai Peninsula Development Project, which is to be implemented by the Armed Forces.
According to a previous statement from Nasr, the Sinai Peninsula Development Project includes agricultural, residential and infrastructure projects in both North and South Sinai. Nasr said Sunday that by creating jobs and encouraging sustainable development in Sinai, the government hopes to eliminate extremism and terrorism.
At Sunday’s meeting, the two governments also discussed progress of a program to support small and medium enterprises, for which Saudi Arabia has already disbursed LE250 million of a promised US$200 million.
The two governments also signed a memorandum of understanding to encourage Saudi Investment. In December, Saudi Arabia announced plans to increase its investments in Egypt to around $8 billion. Few details were announced, leading to speculation that the plans were linked to Egypt’s inclusion in the Saudi-led “Islamic Military alliance” against terrorism.
An important financial backer for Egypt, Saudi Arabia has recently been looking for loans of its own, as low petroleum prices have left the country with a massive budget deficit. According to Reuters, the Kingdom is looking to borrow $6-8 billion, its first significant foreign debt in decades.