China to invest up to $11.2bn in new Egyptian capital

11 September 2017

Investment drive part of Beijing’s Silk Road economic initiative

China is expected to invest up to $11.2bn to develop Egypt’s new administrative capital near Cairo, both parties announced on the sidelines of the ninth BRICS Summit in China.

An electric train project linking Cairo’s Salam City and the new administrative capital as well as developing a satellite for Egypt will feature among projects that will receive Chinese funding.

Beijing signed a memorandum of understanding (MoU) with Cairo to finance the rail project, which is estimated to be worth around $739m. The railway link, which is set to have eleven stops will service the currently unnamed capital being built some 45km north of Cairo. Egypt will be expected to repay the loan over a period of 15 years, with a grace period of five years.

China is expected to complete the rail link three years from the time the project breaks ground, however, Egypt’s President Abdul Fattah al-Sisi has urged Beijing to expedite the process if possible.

Beijing is expected pump around $3.2bn into the construction of phase two of the rail project. Chinese investors are also expected to channel investments worth $8bn in assorted projects in the upcoming Egyptian capital city.

In the first half of 2017, trade between Cairo and Beijing stood at nearly $5bn, with China looking to increase capital projects as part of its Silk Road economic initiative.

China’s plans to invest in Africa’s most populous country is typical of its recent drives to secure market and resources from the continent.

Beijing recently signed agreements to import oil from West African Opec producer Nigeria, in order to diversify its risk to Middle East crude. It has also invested in farm lands in countries such as Kenya and is looking to invest up to $60bn in new projects across Africa.

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