China State Construction Engineering Corporation (CSCEC) finalized a 3 billion-U.S. dollar deal to build a massive Central Business District (CBD) in Egypt’s new administrative capital, some 50 km east of Cairo.
The deal was signed by CSCEC Vice President Zheng Xuexuan and Egyptian Housing Minister Mostafa Madbouly, in the presence of Egyptian President Abdel-Fattah al-Sisi and Chinese Ambassador to Egypt Song Aiguo.
Under the deal, CSCEC will build the CBD on a total area of about half a square km. The district includes a 345-meter high skyscraper, the would-be highest building in Africa, 12 business complexes, five residential buildings and two hotels.
Chinese banks will provide 85 percent of the funding needed for the $3 billion skyscraper-studded portion of Egypt’s new capital which is being developed by the China State Construction Engineering Corp., a senior official with the state-run company said Sunday.
He said the company is negotiating with several local contractors, but declined to provide additional details.
First, finalizing the deal, whose initial signing was witnessed by Chinese President Xi Jinping and Sisi during Xi’s first state visit to Egypt in January 2016, manifests the depth of the China-Egypt cooperation.
Second, it is part of the China-Egypt cooperation within the framework of China’s Belt and Road Initiative.
Third, the project has symbolic significance as it will be a long-lasting sign of the China-Egypt friendship for next generations to come.
Egypt had previously sought to develop the project with a Dubai real estate company before reaching a deal with the Chinese developer after overcoming all points of disagreement.
China and Egypt enjoy strong and growing ties politically, economically and culturally, as they celebrated the 60th anniversary of their diplomatic ties in 2016, which was marked as the China-Egypt Cultural Year.
The two countries have also raised the level of their ties to a comprehensive strategic partnership.
At Xi’s invitation, Sisi visited China in early September to attend the 9th BRICS summit of the economic bloc including Brazil, Russia, India, China and South Africa.
Xi reiterated China’s support for Egypt’s stability and development, vowing to advance the comprehensive strategic partnership with the Arab country.
Egypt is also a major hub in China’s Belt and Road Initiative launched four years ago, which is designed to revive ancient trade routes to link China with a number of countries in Asia, Africa and Europe through trade and infrastructure networks.
The construction of Egypt’s new administrative capital is a national mega project that is designed to gradually expand over an area of 700 square km.
With government departments and ministries moving in after its completion, business centers, residential housing, hotels, green spaces and other facilities will also be built, which will provide vast job opportunities.
Egypt will be given a grace period of 36 months to 42 months — until construction is completed — before repayment begins on the 10-year loan, Assistant Housing Minister Khaled Abbas said in an interview.
Loan terms are still be negotiated, but the interest rate is expected to be between 2 percent to 3 percent, he said, adding that the Housing Ministry’s portion is also backed by a sovereign repayment guarantee.
The project was unveiled as Egypt embarked on a series of sweeping changes aimed at reviving an economy battered after the 2011 uprising that toppled Hosni Mubarak.
Egypt’s military holds a 51 percent stake in the project, with the Housing Ministry carrying the remaining stake.