Other BriefingsEgypt Unlocks EU Funds to Boost Foreign and Domestic Investment Opportunities
Egypt EU relations play a pivotal role in supporting the goals of Egypt Vision 2030, a strategic roadmap launched by Egypt’s Ministry of Planning, Economic Development, and International Cooperation in 2016. The vision aims to achieve sustainable development across economic, social, and environmental sectors by incentivizing private investment. This article explores how the EU’s ‘Investment Guarantees for Development’ scheme can further strengthen these relations and support Egypt Vision 2030’s development objectives.
By Daniel Golan
On March 3, 2025, Egyptian Minister Dr Rania Al-Mashat hosted a delegation of important commissioners and advisers from the European Commission, including Mr Stefano Sanino, Director-General for the Middle East and North Africa, and Ms Annika Eriksgard, Director for Financial and Economic Affairs. In the meeting, Dr Al-Mashat reaffirmed Egypt’s intention to continue building a bilateral partnership with the EU and discussed strategies to strengthen future cooperation, particularly through leveraging the EU’s Investment Guarantees to entice private sector investors.
A primary goal of Egypt Vision 2030 is to empower the private sector to address the country’s economic challenges through easing restrictions, reducing bureaucracy, and supporting the direction of private financing toward national priorities. The allocation of $1.95 billion under the European Fund for Sustainable Development Plus (EFSD+) signals the EU’s willingness to support Egypt’s goal of fostering a positive investing environment. In a further meeting with the European Commissioner for the Mediterranean, Dubravka Šuica, Dr Al-Mashat expressed the Ministry’s sincere appreciation for the financial support and confirmed Egypt’s intention to maximize the potential the funds can bring.
One potential beneficiary of the investment mentioned during the meeting was the Abu Qir Metro project in Alexandria, jointly financed by the European Investment Bank, the French Development Agency, and other partner institutions. The Abu Qir metro is part of the Nexus of Water, Food, and Energy (NWFE), which aims to raise funds for green projects across multiple sectors. By modernizing the 22-km railway line through renewing the electrical and mechanical systems, creating additional metro stations, and renovating railway cars, Egypt hopes to accelerate its transition into a climate change-resilient nation with sustainable national infrastructure.
In addition, Al-Mashat seeks to attract a further US$5.4 billion following the initial investment guarantee to support other key development areas that align with Egypt’s and the EU’s shared priorities.
A look at the history of Egypt-EU trade and investment
The development of the Investment Guarantee Mechanism follows the formation of the new European Commission late in 2024, which included the establishment of a new Director General appointed to oversee the implementation of a framework for mutual policy goals shared by the EU and countries nestled on the Mediterranean coast. Commissioner Dubravka Šuica, former major of Dubrovnik and European Commission Vice President for Democracy and Demography, is leading the New Pact for the Mediterranean–a scheme designed to address shared challenges between the EU and Mediterranean countries as well as promote investment in areas of mutual interest, including energy and transport. According to Dubravka, “Egypt is a key strategic partner of the EU, playing a crucial role in regional stability.”
Egypt-EU trade relations were established in June 2004 following the Association Agreement, which outlined a general framework for developing closer political alliances and trade in goods, services, and capital. The more recent Partnership Priorities agreement set out in 2022 following the ninth meeting of the Association Council of the EU and Egypt highlighted a more detailed vision of joint trade and investment plans between 2021 and 2027. This Partnership will follow the four guiding principles of Egypt’s Vision 2030: human-centered development, equity and accessibility, resilience and adaptation, and sustainability.
Both sides aim to transform Egypt’s investment profile, with ample growth opportunities such as the Suez Canal Economic Zone, transportation, and renewable energy. Dr Al-Mashat confirmed that her Ministry’s investment in 2024/25 would equal US$39.5 billion, with 50 percent allocated to both public and private investment, respectively.
What actions has Egypt taken to raise investment?
In a meeting in January 2025, the Egyptian Ministerial Group for Entrepreneurship, chaired by Dr Al-Mashat, held its third session to propose a package aimed at fostering innovation and entrepreneurship. The meeting ended with the launch of the ‘Startup Charter’, a strategic plan designed to boost investor confidence and support rapid growth. The initiative emphasizes the critical role of the private sector in Egypt’s future economic prosperity, especially focusing on the potential of AI and other digital technologies.
Furthermore, a deal between the Egyptian government and the UAE was signed in May 2024 to allow Abu Dhabi ‘development rights’ to a prime coastal area in Egypt called Ras Al-Hekma. The 40,600-acre stretch along the Mediterranean was invested to the tune of US$35 billion and is expected to add US$150 billion in future investment, according to Prime Minister Mostafa Madbouly. The deal, offering the largest stretch of land for development in Egypt’s history, signifies Egypt’s seriousness in kickstarting the country’s economic growth.
What are the potential impacts of the Investment Guarantee Mechanism?
One of the potential impacts of the Investment Guarantee Mechanism is a boost to Egypt’s food security. The European Investment Bank announced a US$97 million financial package to help Egypt upgrade their silo and storage infrastructure. Egypt has previously faced significant challenges in securing its wheat supply, including inadequate capacity, administration issues, and financial issues, which have led to increasing food prices and concerns about the industry’s future. This investment will ensure that the country can withstand market volatility and benefit millions of Egyptian citizens. Commissioner Dubravka Šuica signed off her meeting with Dr Al-Mashat with the following words: “The signing of the EUR 90 million with EIB to enhance food resilience by buying wheat is a highlight of my visit. This is a testament of our ongoing collaboration in addressing critical challenges.”
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