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Egypt secures $14 billion boost from UAE in landmark investment deal

Egypt secures $14 billion from UAE, part of a $35 billion deal, boosting its economy with total funding reaching $57 billion.

By Mackenzie Crow

5/15, 10:44 EDT
Goldman Sachs Group, Inc.

Key Takeaway

  • Egypt secures a $14 billion boost from UAE, part of a larger $35 billion deal, aiding economic recovery and unlocking additional international financing.
  • Goldman Sachs and Blue Owl Capital expand in the Middle East, targeting Gulf public markets and private credit, reflecting growing international investment interest.
  • The UAE-Egypt deal and global firms' expansions highlight the Middle East's increasing appeal to investors and its role in global emerging markets.

Egypt's Landmark UAE Investment Deal

Egypt has received a significant boost with a further $14 billion from its landmark investment deal with the United Arab Emirates (UAE), marking another step forward in the country's economic recovery. This transfer is part of a larger $35 billion pact signed in February, which stands as Egypt's biggest-ever inward investment. The deal has been a turning point for Egypt, helping to alleviate a chronic foreign-exchange shortage and facilitating a much-needed devaluation of the Egyptian currency. This move has also unlocked additional financing from the International Monetary Fund (IMF), European Union, and other sources, bringing the total secured funding to $57 billion.

Strengthening Egypt's Economy

The initial tranche of $15 billion was received shortly after the agreement, with a portion of this sum coming from existing Emirati deposits in the Egyptian central bank. Prime Minister Mostafa Madbouly announced that procedures have commenced to exchange another UAE deposit of $6 billion into Egyptian pounds. This influx of funds is expected to further stabilize Egypt's economy, which has faced challenges from a two-year economic crisis.

Gulf Region Investment Strategies

Goldman Sachs Group Inc. is planning to launch several investment strategies targeting the Gulf's public markets, aiming to capitalize on the region's growing appeal to international investors. Marc Nachmann, Goldman’s global head of asset and wealth management, noted that companies based in the Middle East currently comprise about 7% of the MSCI Emerging Markets Index, with potential growth up to 10%. This reflects a shift in dynamics, with Gulf countries increasingly looking to attract funds for domestic initiatives. Goldman Sachs is also expanding its private credit business, partnering with Abu Dhabi’s Mubadala Investment Co. for direct lending across Asia, indicating confidence in the region's credit risk management despite higher interest rates.

Expanding Presence in the Middle East

Parallel to Goldman Sachs' efforts, Blue Owl Capital Inc. is making significant strides in the Middle East, hiring Haitham Abdulkarim to lead its institutional business in the region. The firm has received a $1 billion investment commitment from Mubadala Investment Co. and has partnered with Lunate, backed by Abu Dhabi's ADQ, to invest in mid-size asset managers. This expansion underscores the growing interest and confidence in the Middle East's investment potential, with firms like Blue Owl Capital enhancing their on-the-ground capabilities to better serve regional partners.

Management Quotes

  • Mostafa Madbouly, Prime Minister of Egypt:

    "Authorities have begun procedures to exchange another UAE deposit of $6 billion into Egyptian pounds."