CAIRO: Spain will give Egypt $375 million to finance nationwide infrastructure projects. In a bid to boost bilateral trade and investment, Egypt and Spain signed two strategic treaties on Wednesday during the official visit of King Juan Carlos of Spain.
“The financial protocol will see Egypt receive ?250 million in the form of [three] loans and a grant, said Spanish Minister of Industry Joan Clos after signing the protocol.
The protocol, he added, involves new mechanisms for bilateral cooperation: Egypt will receive ?240 million in debt as well as a ?10 million grant, cementing future Spanish investment projects in Egypt.
The protocol seeks to strengthen ties on matters such as renewable energy, oil and gas, tourism, education, health and infrastructure investment.
“Egypt is currently eyeing infrastructure development projects, particularly in fields like logistics as well as road and port building, explained Egypt’s Minister of Foreign Trade and Industry Rachid Mohamed Rachid. “Spain is already a pioneer in such fields worldwide.and we want to [learn and benefit] from their experience.
Both ministers also signed a protocol of cooperation for the first Egyptian-Spanish industrial zone in Egypt on an area that spans two million square meters. The ministry expects the zone to bring some ?4 billion of investment into Egypt in the first two years of operation.
Construction is to be completed within the next 18 months with Spain’s Zona Franca undertaking marketing the zone to Spanish investors.
“Today’s [treaties] signify a strong push for Egyptian-Spanish economic and business ties, Rachid added. “Being signed [during the visit of] the King of Spain to Egypt further proves that we are on the right track of building stronger ties.
The Spanish monarch began Tuesday his second official visit to Egypt, where he held talks with Egypt’s President Hosni Mubarak and other top political and business leaders.
King Carlos also inaugurated Wednesday the Spanish-Egyptian Business Forum.
“Spain and Egypt have brought bilateral ties [both political and economic] to [unprecedented highs]. Still, it is a long road ahead to reach much higher levels in bilateral relations, the King stated.
Spain is Egypt’s second largest importer within the European Union (EU) and ranks fourth in terms of trade volume with Egypt, importing around $2 billion worth of goods from Egypt until 2006.
Based on Egypt’s ministry of trade records, bilateral trade stood at more ?1.4 billion in 2007, up from some ?1 billion in 2006. Egypt’s overall exports to Spain amount to ?1220.46 million, while imports stand at ?311.13 million.
Egypt is currently striving to augment its non-oil exports to Spain (particularly building materials and ready-made garments) from $465 million in 2006 to $1 billion by 2012.
Main Egyptian exports to Spain include mineral fuels, oil and gas, steel, marble and granite, fertilizers, chemical products and plastic. On the other hand, imports from Spain include machinery, paper, vehicles and copper.
Being the ninth strongest economy worldwide and the fifth across the EU, the Spanish economy exports the highest levels of capital to trading countries. Spanish investors, Minister Rachid pointed out, constantly seek investment opportunities in emerging countries like Egypt to benefit from lower production costs, the growing size of these markets, as well as rising economic growth rates.
“It’s a win-win situation, he said. Spain, he continued, can implement more projects in Egypt and benefit from cheap labor force; at the same time, Egyptian producers will be able to export to Latin America through Spain.
“We don’t have presence in Latin America’s markets, and Spain can help us in that matter by acting as our gateway.
Spanish investments in Egypt currently stand at around $400 million, across a wide variety of sectors including natural gas, cement, renewable energy, processed food, textiles and ready-made garments, and tourism. Still, Egypt seeks to attract more Spanish investments and aspires to raise that figure to $1 billion over the next five years.
Additional Spanish investments are expected to pour into Egypt this year in sectors including textiles (?20 million), and chemicals (?20 million).
Negotiations are also underway with Spanish investors in areas of waste management and sanitation.
Spain also revealed intentions to further increase its investment in tourism and hospitality, namely across Egypt’s Mediterranean and Red Sea coasts.
“Egypt attracted 11 million tourists [last year alone], up from six million in [2003]. This means that number of tourists visiting the country has doubled in four years, said Clos. “That is why, Spain is keen on investing in Egypt’ tourism sector.
