An Abu Dhabi wealth fund has agreed to invest about $2 billion in Egypt by buying state-held stakes in some companies, including the country's leading private-sector bank, Commercial International Bank (CIB).
According to a report yesterday by Bloomberg, citing people familiar with the deal, Abu Dhabi's ADQ, which has previously invested in the North African country, will acquire about 18 per cent of CIB which accounts for about half of the overall deal.
The unnamed sources also revealed that ADQ is buying stakes in four other companies listed on Egypt's stock exchange.
The UAE and, in particular ADQ, are long-term investors in Egypt, with the sovereign wealth fund having acquired an Egyptian pharmaceuticals company from Bausch Health Cos last year for $740 million. Later that year, as part of a consortium, ADQ purchased Egyptian real estate developer, SODIC, for $388 million.
News of the agreement comes as Egypt comes to grips with the impact of Russia's invasion of Ukraine last month, with the conflict posing an existential threat to Egypt's food security. Egypt is the world's largest wheat importer, most of which comes from both Russia and Ukraine. Yesterday, Prime Minister Moustafa Madbouly, set the price of commercially sold bread at 11.50 Egyptian pounds ($0.66) per kg, according to a statement by his office.
The war has also caused the Egyptian pound to depreciate by almost 14 per cent, with foreign investors withdrawing billions of dollars from Egyptian treasury markets. The Central Bank also announced that it had raised interest rates, which has been met with growing popular outrage.