Saudi Arabia pledged more aid to Egypt during the second meeting of the Egyptian-Saudi Coordination Council held in Cairo in December. The oil-rich kingdom agreed to invest 30 billion riyals ($8 billion) in Egypt through its public and sovereign funds, with the inflows beginning immediately, Investment Minister Ashraf Salman said. Egypt is also set to renew a deal to import Saudi oil products for five years on favourable terms, Prime Minister Sherif Ismail said. The 30 billion riyals constitute fresh investment that will be pumped into Egypt's struggling economy. “The current Saudi investments in Egypt amount to some 30 billion riyals, and investing the same sum again means that Saudi Arabia is doubling its total investments,” said Ahmed Darwish, secretary-general of the Saudi-Egyptian Business Association (SEBA). Where these investments will go will be decided during the upcoming meetings of the Egyptian-Saudi Coordination Council, said Darwish, adding that the government had prepared several projects in the fields of tourism, infrastructure, agriculture and industry, in addition to the building of the new administrative capital. “Talks are currently being held at the governmental level and not at the level of companies and business organisations, so the picture of where precisely the investments will go isn't clear yet,” Darwish told Al-Ahram Weekly. Talks between Egyptian and Saudi officials are set to continue in Riyadh on 5 January. Meanwhile, one official told the Bloomberg news agency this week that the Egyptian government had offered Saudi investors tourism projects in the Red Sea resort of Sharm El-Sheikh, as well as a mixed-use real-estate project west of Cairo on a partnership basis, and that the Saudi investors were studying the proposed projects. Darwish said that the new aid package was separate from the $4 billion pledge Saudi Arabia made in March during the Egypt Economic Development Conference (EEDC). Egypt received $2 billion of this package in April. The remaining $2 billion will be rendered in the form of loans and aid. Government sources told the Aswat Masriya news website that Egypt and Saudi Arabia had agreed on the provision of an aid package worth $1.5 billion and that they were negotiating a further $500 million, without giving details of the negotiations. The sources said that $750 million of the package would go to importing non-petroleum products from Saudi Arabia through loans on favourable terms. The imported products could include agricultural machinery for a 1.5 million-feddan land reclamation project, smart home electricity meters, and supporting the manufacture of drugs to treat hepatitis C. Another $750 million would arrive in the form of soft loans to fund Egyptian government development projects in the fields of education, health, energy, housing and infrastructure, the sources added. Saudi Arabia has given billions of dollars of aid to Egypt since the 30 June Revolution that ousted former president Mohamed Morsi in 2013, and the latest package suggests that the country remains committed to supporting Egypt despite a sharp fall in the kingdom's income from oil, which makes up over 90 per cent of public revenues, due to plunging oil prices. Together with the UAE and Kuwait, Saudi Arabia has extended $23 billion in aid and investments to Egypt since June 2013. Regarding the petrol aid, petroleum minister Tarek Al-Molla said the government would discuss with the Saudis how this could be provided over the next five years. The Egyptian General Petroleum Corporation (EGPC) signed a contract with Saudi Arabia's state-owned Aramco in September to provide Egypt with its petroleum needs for three months on favourable payment terms over three years at an interest rate of only three per cent. The $1.4 billion deal included 500,000 tons of diesel fuel, 220,000 tons of heating oil, and 150,000 tons of petrol per month. Some government sources suggest that the government will renew the contract with Aramco to supply Egypt with petroleum products for five years starting in January 2016 at the same interest rate of three per cent. According to data from EGPC, Egypt needs 500,000 tons of diesel, 300,000 tons of butane gas, 150,000 tons of petrol and 500,000 tons of fuel oil (mazut) on a monthly basis.
