Egypt, Saudi Arabia agree $16 billion investment fund, settle

Egyptian President Abdel Fattah al-Sisi and Saudi King Salman have agreed to set up a USD 16-billion investment fund and settled a long-standing maritime dispute as the monarch continued his rare visit to the country. A day after Salman announced a plan to build a bridge over the Red Sea to Egypt, the heads of state met at the historic Abdeen Palace in Cairo to oversee the inking of a string of agreements Egypt hopes will help boost its battered economy.

In one of the most high-profile announcements, Cairo yesterday said it had agreed to demarcate its maritime borders with Saudi Arabia, officially placing two islands in the Straits of Tiran in Saudi territory. The 80-year-old Saudi monarch’s visit to Egypt has been seen as a clear show of support for Sisi, the former military chief who toppled his Islamist predecessor Mohamed Morsi in 2013. Since touching down on Thursday, Salman and his delegation have announced a slew of investments in Egypt.

A live Egyptian state television broadcast yesterday showed an official announcing the latest agreements, signed by a representative of each country. The two nations agreed “to set up a Saudi-Egyptian investment fund with a capital of 60 billion Saudi riyals (USD16 billion),” the announcer said, giving no further details. More than a dozen other accords, including a memorandum of understanding to set up an industrial zone in Egypt, were also announced.

Saudi Arabia has been a key backer of Sisi since the overthrow of Morsi, whose Muslim Brotherhood movement was viewed by Riyadh with suspicion. It has since pumped billions of dollars in aid and investment into Egypt. Egyptian officials and media have heaped accolades on Salman, with state television welcoming him to what it called his “second country”—a country Riyadh views as a cornerstone in its ambitions to be a regional leader against Iran.

But the agreement announced by the cabinet yesterday to settle the dispute over the islands of Tiran and Sanafir provoked an immediate backlash in Egypt, where thousands tweeted a hashtag accusing Sisi of selling the islands. Tiran had historically been a Saudi island ‘leased’ to Egypt in 1950. Earlier yesterday, Salman paid a visit to the prestigious Al-Azhar mosque.