Qatar to Transfer Egypt $3.5 Billion For Mediterranean Tourism Site This Year

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(Bloomberg) — Egypt will get $3.5 billion from Qatar by the end of the year, with the Mediterranean tourism investment potentially paving the way for Cairo to unlock billions of dollars from the International Monetary Fund.

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Qatari Diar, a real estate firm owned by the Gulf nation’s sovereign wealth fund, will transfer the money as the first step in the development, Egyptian Prime Minister Mostafa Madbouly told reporters on Thursday at a signing ceremony. Bloomberg and other media announced many of the details a day earlier.

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Egyptian officials said Qatar will invest almost $30 billion over the course of the seven-year project. The prime minister added that once Qatari Diar recuperates all its investment costs, 15% of the profits will be allocated to the New Urban Communities Authority, an Egyptian government entity.

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The hard-currency infusion will help Cairo clear a much-awaited IMF review and get more financing from the Washington-based lender. The deal was months in the making, Madbouly said.

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Qatari Diar will develop an area on Egypt’s northern coast called Alam Al-Roum. It’s set to build hotels and golf courses, with the aim of attracting regional and international visitors.

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The deal marks the latest support for Egypt from the energy-rich Gulf, mirroring a $35 billion investment from the United Arab Emirates in early 2024 that included developing Ras El-Hekma, a nearby headland three times the size of Manhattan where a new city and airport are meant to be built. That pact was a cornerstone of a $57 billion global bailout that gave Egypt the fiscal firepower to tackle its worst economic and currency crisis in decades.

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Bloomberg in June reported Qatar and Egypt were in advanced talks on a Mediterranean development deal as part of a previously announced $7.5 billion investment package.

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Egypt’s northern coast, long a choice destination for wealthier Egyptians but less developed than Red Sea areas for mass tourism, is playing an increasingly important role in the country’s plans to boost foreign visitor arrivals to 30 million by 2031. Tourism is one of Egypt’s most important sources of foreign exchange.

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While the economy of the Middle East’s most populous nation has stabilized thanks to last year’s injections, authorities are trying to attract more large-scale foreign direct investment. That’s a key plank of Egypt’s current $8 billion loan program with the IMF, only part of which has been disbursed.

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The Washington-based lender postponed and then combined the last two reviews of the Egyptian loan, waiting for authorities to show more progress before handing over more funds. The IMF wants Egypt’s government to privatize more assets and roll back the state and military’s involvement in the economy.