Qatar is betting on Egypt’s tourism rebound with $10 billion investment

Qatar said it would invest $18 billion in tourism and industry projects along Egypt’s Mediterranean coast over the next five years.

The projects include $ 8 billion for gas, power and iron and steel plants at the northern entrance to the Suez Canal and $10 billion for a giant tourist resort on the Mediterranean coast.

Egypt’s stock exchange closed at a 14-month high on Thursday on optimism that a new government with a clear popular mandate will secure investments and donor aid to stave off a balance of payments and budget crisis.

Cairo last month formally asked the International Monetary Fund for $4.8 billion in emergency funding.

“We spoke with President Muhammad Mursi and agreed to invest $8 billion on a power plant, natural gas and iron steel,” said Qatar’s Prime Minister Sheikh Hamad bin Jassim Al-Thani.

“This will be in a integrated complex in East Port Said.”

Sheikh Hamad was speaking at a joint news conference with Egyptian Prime Minister Hisham Kandil shortly after meeting President Mursi.

He said the investments in the Port Said projects would extend over five years.

Qatar announced three months after the popular uprising that toppled Hosni Mubarak that it was interested in investing near Port Said, but the plan had lain dormant since then.

In the last few months, Egypt has received more than $5 billion in loans and pledges, including $2 billion in direct budget support from Qatar and loans from Saudi Arabia and the Islamic Development Bank.

Qatar deposited $500 million in direct budget support at the Egyptian central bank in August and said it would pay the remaining $1.5 billion over the coming three months.

(c)2012 the Arab News (Jeddah, Saudi Arabia). Distributed by MCT Information Services.