From Ras El-Hekma to Alam Al-Roum: The risks of selling land to service debt

Finance Minister Ahmed Kouchouk does not oversee housing, investment or tourism. Yet his presence at last month’s signing of the Alam Al-Roum land deal on Egypt’s North Coast was telling.

The agreement grants development rights over the area to Qatari Diar. Al Arabyia noted the minister’s evident satisfaction, less with the real estate project itself than with what it promised for the public finances. From the outset, the deal was framed as a means of raising revenue to help chip away at Egypt’s swelling public debt.

Such transactions are no longer exceptional. Since September 2024, when PM Mostafa Madbouly said the government would replicate the Ras El-Hekma model across five coastal sites, large-scale land sales to foreign developers have become a recurring feature of Egypt’s economic policy.

Kouchouk’s remarks after the signing defined the North Star. The government is increasingly presenting land-development projects as instruments of debt management, at a time when interests payments on public debt have risen beyond the state’s total budget revenues.

The finance minister has said that most of his ministry’s share of the Alam Al-Roum proceeds will be used to pay down public debt. Economists, however, doubt the durability of this approach. Though the Qatari deal is significant, particularly given the accumulation of debt pressures in recent years, they warn that asset sales offer, at best, temporary relief.

They also point to scale. Alam Al-Roum is far smaller than Ras El-Hekma; a reminder of how hard it may be to replicate the Emirati model. Relying on land sales to bring debt under control risks exhausting the most marketable assets without addressing the underlying imbalance.

Future challenges

Despite repeated criticism of selling land to foreign investors, Egypt has signed three large coastal development deals since 2024; first Ras El-Hekma, then Alam Al-Roum, followed by a Red Sea project with investments valued at $18.5 billion announced by the UAE developer Emaar alongside the Saudi businessman Hassan Al-Sharbatly.

Supporters argue that such deals offer one of the few available outlets for relieving Egypt’s foreign-currency squeeze. Israa Ahmed, a financial analyst, points to a "chronic trade deficit in goods that exceeded $50 billion in fiscal year 2024–25." The imbalance has continued to widen even after the exchange rate stabilized following the Ras El-Hekma agreement, partly because of increased imports of liquefied natural gas to avert renewed electricity shortages.

The pressure is set to intensify. "Egypt faces a dense schedule of dollar-denominated repayments, with installments alone amounting up to $44 billion in 2026." These obligations, Ahmed tells Al Manassa, have pushed the government towards exceptionally large investment deals—most visibly through the sale of prime coastal land to Gulf investors.

Critics see limitations of this approach. Mohamed Fouad, an economist and member of the cabinet’s macroeconomics committee, accepts that asset sales and usufruct arrangements can generate much-needed dollar liquidity. But he warns they also consume the most attractive assets, narrowing the scope for raising future funds.

Others strike a more optimistic note. Ahmed Magdy Mansour, a banking expert, argues that deals of this scale can ease debt pressures indirectly by signalling a safer investment climate and stronger return prospects. That, he says, may help improve Egypt’s standing with international lenders.

Such perceptions matter. In recent years, downgrades and heightened risk assessments by credit-rating agencies have pushed up borrowing costs. World Bank data show that interest payments on Egypt’s long-term external debt have doubled since 2021, reaching $6.7 bn in 2024.

The younger sister

The financial returns from Egypt’s two flagship coastal deals differ sharply by “several multiples” in favour of the Emirati agreement, Mohamed Fouad told Al Manassa.

Under Ras El-Hekma agreement, the UAE paid $24 billion in exchange for development rights. By comparison, Qatar committed to a cash payment of $3.5 billion for Alam Al-Roum, according to a cabinet statement.

Scale explains the disparity. Ras El-Hekma covers around 170 square kilometers, while Alam Al-Roum spans roughly 20. On a narrower measure, however, the Qatari deal appears more expensive. Israa Ahmed calculated that the price per square meter exceeded $170 at Alam Al-Roum, compared to $140 at Ras El-Hekma.

The higher price, she told Al Manassa, reflects a shift in negotiating conditions. The Ras El-Hekma talks took place at the height of Egypt’s foreign-currency crunch, when the government was forced to accept a valuation that later became “unacceptable”. By the time the Qatari deal was concluded, the exchange rate had stabilized, allowing the state to press harder; an approach PM Madbouly described as “tough and extensive”.

Even so, headline figures risk obscuring fiscal reality. The government has yet to announce how much revenue the state budget will ultimately receive from Alam Al-Roum through the New Urban Communities Authority (NUCA), an economic authority with a separate budget from the general treasury, and a formal partner in the deal. The cabinet has said the state’s total share will reach $3.5 billion—around 166 billion  pounds at current exchange rates.

By contrast, Reuters led its coverage of the Alam Al-Roum agreement with an overall project value of $29.7 billion. But most of that sum represents investments Qatari Diar plans to carry out in Egypt, rather than cash proceeds flowing to the state or to NUCA, or funds available to reduce external debt. Ras El-Hekma was different: around $35 billion was allocated for budget support and debt relief.

“The announced figure includes future investments that will not necessarily enter state coffers,” Fouad told Al Manassa, warning that this had inflated perceptions of the Qatari agreement.

According to finance ministry data, NUCA transferred 510 billion pounds—about $10.7 billion—to the general budget from the Ras El-Hekma proceeds. No comparable transfer has yet been announced for Alam Al-Roum.

The distinction matters. Counting long-term investment commitments as fiscal windfalls, Fouad said, risks overstating what such deals can realistically deliver.

Coastal land deals may buy Egypt time, but not transformation. Israa Ahmed told Al Manassa that while such projects can offer short-term relief from debt pressures, they lack the developmental impact the economy ultimately needs. That, she argued, will come only from projects that expand productive capacity—most notably in industry—rather than from monetising finite assets.

The government is willing to trade land for liquidity. But as Fouad warned, "each deal narrows the space for the next." When the most attractive assets are gone, the underlying imbalance between what Egypt earns and what it owes, will remain.