Egypt has signed an agreement with Saudi Arabia’s Finance Ministry, finalising a deal that will see Riyadh support Cairo with petroleum products.

The agreement, which was signed in Riyadh during a Saudi-Egyptian Coordination Council meeting on 20 March, follows a pledge by King Salman bin Abdulaziz al-Saud in December 2015 to increase the kingdom’s investments in Egypt.

The monarch pledged to increase Saudi investments to more than SR30bn ($8bn) to secure Egypt’s petroleum demands for the next five years.

Egypt’s Minister of International Cooperation Sahar Nasr also signed an agreement with the Saudi Fund for Development (SFD) during the same meeting.

The memorandum of understanding (MoU) will see the development fund pump $1.5bn into “the development of the Sinai peninsula”. SFD will support the development of a university, as well as residential and agricultural projects.

Nasr is also understood to be negotiating funds with SFD for a $120m upgrade of the Qasr el-Ainy hospital in Cairo.

Support from Saudi Arabia for Egypt has continued, although this support now comes in the form of investments and oil products, rather than grants and central bank deposits as seen in early 2015.

US ratings agency Moody’s Investors Service has warned that changes in the external financial support Cairo is receiving will increase future repayment obligations at a time when the country’s main focus is to improve the supply of dollars in order to assist import industries and entice foreign investors.

As such, relationships with international financial institutions such as the World Bank and the IMF have restarted despite the attachment of fiscal and governance conditions, which Egypt has proven reluctant to apply.