Qatar to invest $30bn to build Egyptian beach resort

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Qatar has said it will buy a large swath of Egypt’s Mediterranean coastline as heavily indebted Cairo sells off land to Gulf sovereign real estate developers to secure dollars and unlock $2.5bn from the IMF.

The $29.7bn deal, one of the biggest foreign investments in Egypt, was announced on Thursday by Qatari Diar, a government development arm owned by Qatar’s sovereign wealth fund, which said it would transform about 4,900 acres on Egypt’s northwestern coast into an all-year luxury tourist and residential destination.

Doha will pay $3.5bn upfront, with the rest invested over several years in a land parcel stretching more than 7km along the coast.

“The deal with Qatar injects fresh cash into the economy and will help get things moving with the IMF,” said Mohamed Abu Basha, managing director and head of macroeconomic analysis at EFG-Hermes, the regional investment bank.

The IMF delayed disbursement of a $2.5bn tranche of an $8bn loan to Egypt in July and postponed to later this year a review of the country’s economic programme, giving Cairo more time to implement measures including divesting from state-owned assets and levelling the playing field for the private sector.

Gas-rich Qatar’s move mirrors a deal with Abu Dhabi last year, when sovereign investor ADQ announced a $35bn investment in Egypt. ADQ acquired development rights for another stretch of Mediterranean coast called Ras al-Hekma.

That investment, which was paid in full over two months, enabled Egypt to take its first steps out of a two-year foreign currency crunch and build up dollar buffers needed to move to a flexible currency exchange regime — a key condition for the IMF.

The latest project “reflects Qatar’s commitment, through Qatari Diar, to supporting the Egyptian government’s efforts to achieve sustainable development and activate coastal areas all year round”, said Qatari Diar chair Abdullah bin Hamad bin Abdullah Al Attiyah.

Regional developers have been drawn to Egypt’s north coast, whose pleasant summer temperatures make an ideal getaway for tourists from the baking hot Gulf. Dubai government-backed developer Emaar has built a large project called Marassi and is now constructing another called Soul.

Developers must share part of their profits with the Egyptian government’s New Urban Communities Authority in return for access to the land.

As well as foreign investments, Qatari Diar also works on projects domestically. This year, it announced a new resort that will feature a Trump golf course and residences, built by a Saudi Arabian developer.