Cairo: Egyptian President Abdul Fattah Al Sissi and Saudi King Salman Bin Abdul Aziz agreed to set up a $16-billion (Dh58.77 billion) investment fund on Saturday and settled a long-standing maritime dispute as the monarch continued his rare visit to the country.
A day after King Salman announced a plan to build a bridge over the Red Sea to Egypt, the heads of state met at the historic Abdeen Palace in Cairo to oversee the inking of a string of agreements Egypt hopes will help boost its battered economy.
In one of the most high-profile announcements, Cairo said it had agreed to demarcate its maritime borders with Saudi Arabia, officially placing two islands in the Straits of Tiran in Saudi territory.
The 80-year-old Saudi monarch’s visit to Egypt has been seen as a clear show of support for Al Sissi, the former military chief who toppled his Islamist predecessor Mohammad Mursi in 2013.
Since touching down on Thursday, King Salman and his delegation have announced a slew of investments in Egypt.
A live Egyptian state television broadcast on Saturday showed an official announcing the latest agreements, signed by a representative of each country.
The two nations agreed “to set up a Saudi-Egyptian investment fund with a capital of 60 billion Saudi riyals ($16 billion),” the announcer said, giving no further details.
More than a dozen other accords, including a memorandum of understanding to set up an industrial zone in Egypt, were also announced.
Saudi Arabia has been a key backer of Al Sissi since the overthrow of Mursi, whose Muslim Brotherhood movement was viewed by Riyadh with suspicion.
It has since pumped billions of dollars in aid and investment into Egypt.
Egyptian officials and media have heaped accolades on King Salman, with state television welcoming him to what it called his “second country” — a country Riyadh views as a cornerstone in its ambitions to be a regional leader against Iran.
But the agreement announced by the cabinet on Saturday to settle the dispute over the islands of Tiran and Sanafir provoked an immediate backlash in Egypt, where thousands tweeted a hashtag accusing Al Sissi of selling the islands.
Tiran had historically been a Saudi island ‘leased’ to Egypt in 1950.
Earlier on Saturday, King Salman paid a visit to the prestigious Al Azhar mosque.
He is due to address parliament on Sunday and receive an honorary doctorate from Cairo University on Monday.
An Egyptian government official had said the deals agreed with Saudi Arabia, excluding the investment fund, would amount to $1.7 billion.
On Friday, both leaders lavished praise on each other’s countries and their relationship.
“This visit comes as a confirmation of the pledges of brotherhood and solidarity before the two brotherly countries,” Al Sissi said in a televised speech.
The visit follows months of reports in Saudi and Egyptian newspapers of strained ties over Cairo’s unwillingness to participate fully in Saudi-led military operations against Iran-backed Shiite rebels in Yemen.
Egypt had announced it would back Saudi Arabia with ground troops if needed, but appears to have balked at the prospect of becoming mired in the conflict.
Al Sissi’s close relationship with Russian President Vladimir Putin, who militarily backs Syrian leader Bashar Al Assad against Saudi-supported rebels, has reportedly also caused friction with Riyadh.
However, Saudi Arabia has played a key role in propping up Egypt’s economy, whose vital tourism industry has been devastated by years of political turmoil and terrorist attacks.
For Saudi Arabia, which is in competition with regional rival Iran, keeping Egypt under its aegis is crucial.