meed-logo

line1 line2 line3
SIGN IN / REGISTER

Egypt is in the eye of Trump’s Gaza storm

14 February 2025

 

Egypt finds itself on the frontline of international geopolitical developments, with US President Donald Trump’s suggestion in late January that the Gaza Strip’s population should be permanently relocated to Jordan, Egypt and other Arab countries to make way for the US to seize and redevelop the land.

“I’d like Egypt to take people, and I’d like Jordan to take people,” said Trump on 25 January.

He reiterated his position on 4 February, telling a press conference with visiting Israeli Prime Minister Benjamin Netanyahu that Gazans should be moved to a “beautiful area with homes and safety […] so that they can live out their lives in peace and harmony”.

The idea has attracted a wave of condemnation from political leaders around the world, with Egypt being as outspoken in its criticism.

Speaking on 29 January, President Abdel Fattah Al-Sisi said the proposed displacement of Palestinians “can never be tolerated or allowed because of its impact on Egyptian national security […]. The deportation or displacement of the Palestinian people is an injustice in which we cannot participate.”

Egypt’s Foreign Ministry then issued a statement on 5 February, following a meeting between Foreign Minister Badr Abdelatty and Palestinian Prime Minister Mohamad Mustafa in Cairo, in which it said Gaza should be rebuilt “without moving the Palestinians out of the Gaza Strip”.

Trump’s idea threatens to create fresh turmoil at a time when Qatar, Egypt and others have been trying to create a follow-up peace deal between Hamas and Israel, to take the place of the initial agreement that came into effect in January and is due to expire in late May.

Economic instability

The Gaza war has already created huge problems for Egypt, in both security and economic terms. Traffic through the Suez Canal plummeted by more than 75% in 2024, as a result of the attacks on shipping by Yemen’s Houthi forces in the Red Sea. 

In October, Al-Sisi said receipts from Suez traffic were just $870m in the second quarter of the year, compared to $2.54bn for the same period a year earlier. He said Egypt had lost $6bn-$7bn in revenues in the previous 10 months.

According to Alexander Perjessy, a senior credit officer at Moody’s Ratings, the fall in Suez Canal receipts was responsible for “shaving off more than a full percentage point from the overall GDP growth rate”.

The ratings agency expects growth of 4% this year, assuming regional conflicts do not worsen. Even if the neighbourhood remains calmer, growth is likely to remain below the pre-pandemic levels of close to 5% in 2015-19.

Others are predicting similar growth levels for this year. UK-based consultancy Oxford Economics expects the economy to grow by 3.9% in 2025 – in line with Saudi Arabia and just behind the UAE. Inflation should also come down to about 18% – still high, but much lower than the 28% estimated for 2024.

Political stability is crucial for Egypt to attract the support it needs from foreign investors. In late January, Cairo sold $2bn-worth of bonds. The issuance attracted almost $10bn-worth of orders, pointing to healthy levels of investor interest. However, financing costs are rising. Perjessy estimates that interest costs “will increase to about 60% of revenue in 2025, one of the highest levels of the sovereigns we rate.”

The Egyptian economy has been bolstered in recent times by some significant deals, including a major UAE investment in the $24bn Ras El-Hekma project that was announced in February 2024. Cairo also agreed an additional $5bn loan from the Washington-based IMF in March 2024, adding to an existing $3bn IMF package from December 2022.

However, the country’s difficult economic situation has prompted Al-Sisi to warn that the reform package agreed with IMF in return for the loans may have to be reviewed.

“The programme we have agreed upon with the fund … if this challenge will hurt public opinion, that people cannot bear it, we must re-evaluate our situation,” he told a health and human development conference in Cairo on 20 October.

Cairo’s aid cut carveout

Egypt has at least avoided the worst of the cuts to US international aid, which have affected almost every other recipient.

In one of his first acts after regaining the White House, Trump suspended foreign aid payments for 90 days. However, a leaked memo from the State Department said military aid to Egypt and Israel was exempted. Annually, Cairo receives about $1.3bn by this route.

A number of defence deals have also since moved ahead. On 4 February, the State Department approved a $625m programme to modernise the Egyptian Navy’s fast missile craft and a separate $304m sale of a long-range radar system.

Incoming US Secretary of State Marco Rubio has meanwhile offered some soothing words. In a phone call with Foreign Minister Abdelatty on 23 January, Rubio thanked his counterpart for Cairo’s Gaza mediation efforts and also touched on a matter of great importance to Egypt: control of the Nile River.

A State Department readout said that the two had discussed the importance of finding a diplomatic solution to the dispute, which has been prompted by Ethiopia’s building of the Grand Ethiopian Renaissance Dam. Cairo worries the hydroelectric plant will reduce downstream flows that are vital for its survival.

In mid-October, Egypt’s Prime Minister Mostafa Madbouly told a water conference in Cairo that the dam threatened the livelihoods of more than 1 million people and could lead to 15% of Egypt’s agricultural land being lost.

The geopolitical problems to the south of Egypt have been somewhat overshadowed by the Gaza crisis, but could yet rise in prominence and raise tensions in other regional countries too. In September, Egypt sent at least two arms shipments to the Somalian government, which is locked in its own dispute with Addis Ababa over the latter’s recognition of the breakaway region of Somaliland.

Even if the Gaza crisis is resolved, there will be plenty of geopolitical issues for officials in Cairo to worry about.

Image: Displaced Palestinians set up their tents next to the Egyptian border

MEED’s March special report on Egypt also includes:

> ECONOMY: Egypt’s economy gets its mojo back
> POWER & WATER: Egypt’s utility projects keep pace
> CONSTRUCTION: Coastal city scheme is a boon to Egypt construction

READ THE FEBRUARY MEED BUSINESS REVIEW

Trump unleashes tech opportunities; Doha achieves diplomatic prowess and economic resilience; GCC water developers eye uptick in award activity in 2025.

Published on 1 February 2025 and distributed to senior decision-makers in the region and around the world, the February MEED Business Review includes:

> WATER & WASTEWATER: Water projects require innovation
https://image.digitalinsightresearch.in/uploads/NewsArticle/13384457/main.jpg
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Iraq gas field project disrupted by regional conflict

    26 March 2026

     

    Register for MEED’s 14-day trial access 

    Progress on Iraq’s project to develop the strategically important Akkas gas field has been disrupted by security issues related to the US and Israel’s ongoing war with Iran, according to industry sources.

    Work activity at the project site has been significantly reduced due to security concerns, and the project is now expected to take longer to complete.

    Iraq held a ceremony in January this year to mark the restart of drilling operations at the site as part of the field development project.

    In July last year, Iraq’s Oil Ministry announced signing a contract with the US-based oil field services provider SLB to develop production at Iraq’s Akkas gas field.

    Under the terms of the deal, SLB will drill wells at the Akkas field, aiming to initially raise production to 100 million cubic feet a day (cf/d).

    Many of SLB’s non-Iraqi employees have now been evacuated from the country.

    Over the long term, Iraq is targeting gas production of 400 million cf/d from the field.

    The contract with SLB replaces a previous deal with Ukraine-based Ukrzemresurs, which has been terminated.

    It also covers the construction of surface infrastructure and pipelines to connect Akkas to central processing units.

    The gas produced at Akkas will be used to fuel the Anbar combined-cycle power plant, which is under construction by the Electricity Ministry.

    Akkas gas field development

    The Akkas gas field, located in Anbar province in western Iraq, has 5.6 trillion cubic feet of proven reserves. The field was discovered in 1992 and began production in 1993.

    Since then, Iraq’s plans to develop the Akkas gas field to its full potential have experienced several setbacks.

    In April last year, the Iraqi Oil Ministry signed an agreement with Ukrzemresurs to develop the field.

    At the time, the Oil Ministry said that the partners were aiming to produce 100 million cf/d in the first two years, as per the agreement, with output targeted to increase to 400 million cf/d within four years.

    Prior to Ukrzemresurs, South Korean company Kogas was responsible for developing the field.

    Rights to the field were originally awarded to a consortium of Kogas and Kazakhstan’s state-owned oil company KazMunaiGas (KMG) in the third licensing round, which was launched in October 2011.

    KMG pulled out, leaving Kogas as the sole investor and operator on new contract terms.

    When the deal with Ukrzemresurs was originally announced last year, it was negatively received by some Iraqi politicians, with the Oil and Gas Committee in Iraq’s parliament rejecting the contract signing.

    At the time, Ali Al-Mashkour, a member of the Oil and Gas Committee, told Iraq’s Shafaq News Agency: “This contract involves a great waste of Iraq’s wealth, and there will be a waste of Iraq’s oil, and this confirms that Iraq is once again failing to choose reputable companies to work with in the most important economic field in the country.”

    He added: “We will work to uncover and expose the suspicions in this contract during the next stage, especially since this contract was made by some representatives for specific interests, which we will reveal soon with evidence.”

    Plans to sign the contract to develop the Akkas gas field with a Ukrainian company were first announced by the Oil Ministry in September 2023, but Ukrzemresurs was not named at the time.

    Iraq’s government is trying to transform the country into a gas-exporting nation. Currently, Iraq is reliant on Iran for gas imports.

    Both Saudi Arabia and the US, which are looking to contain Iranian influence in the region, have been supporting Iraq in developing its non-associated gas fields as this will reduce Iraq’s economic reliance on Iran.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16138892/main.png
    Wil Crisp
  • Dubai seeks contractors for Nadd Hessa stormwater project

    26 March 2026

    Dubai Municipality has invited contractors to prequalify for a contract to build a sewerage and stormwater system in the Nadd Hessa area.

    The project is being procured through the Sewerage and Recycled Water Projects Department.

    The submission deadline is 2 April.

    Nadd Hessa is an emerging development area, located between Dubai Silicon Oasis and Academic City along the E311 corridor.

    It has been earmarked for future residential expansion, with enabling infrastructure now being tendered to support planned housing and community developments in the area.

    The scheme, known as DS 328/1–C1, covers the construction of sewerage and stormwater infrastructure, including approximately 12.4 kilometres of sewerage lines with diameters of up to 400 millimetres.

    The scope also includes about 14km of stormwater lines with diameters of up to 1,000 millimetres.

    In addition, the project involves around 500 metres of microtunnelling works for both sewerage and stormwater networks.

    The municipality is currently prequalifying contractors for several upcoming water projects, including the expansion of the Jebel Ali sewage treatment plant (STP) phases one and two.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cubic metres a day (cm/d).

    Bid submissions for this project are also due by 2 April.

    In addition, the authority is planning a broader review of Dubai’s water and wastewater infrastructure to support future population growth, including identifying locations for future infrastructure. 

    Two separate consultancy tenders were issued in March.

    One involves a study to develop a sustainable urban drainage systems strategy across the emirate. The other covers a review of the emirate’s sewage treatment and recycled water distribution strategy. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16138660/main.jpg
    Mark Dowdall
  • WEBINAR: Saudi Gigaprojects 2026 & Beyond

    25 March 2026

    Webinar: MEED in association with HKA Webinar on Saudi Gigaprojects 2026 & Beyond
    Tuesday 31 March | 1:00 GST  |  Register now

    Agenda:

    As Saudi Arabia’s gigaprojects move from vision to delivery, the kingdom’s projects market continues to evolve at an unprecedented pace. Billions of dollars’ worth of contracts are being awarded across infrastructure, real estate, tourism and critical industries, creating huge opportunities — but also new layers of complexity.

    This MEED Live broadcast, in association with HKA, brings together market intelligence and practical expertise to help project stakeholders understand and navigate the risks in this dynamic landscape.

    The session will open with Ed James, MEED’s head of content and research, who will deliver a comprehensive 30-minute outlook on Saudi Arabia’s gigaprojects and beyond. Drawing on MEED’s proprietary data and insights, Ed will highlight the scale of opportunity, sectoral trends and the finance shifts shaping the region’s project pipeline.

    Following the outlook, Ed will host an in-depth fireside chat with Haroon Niazi, partner at HKA, focusing on the critical theme of contractual risk management. In a market defined by rapid delivery schedules, shifting finance conditions and complex stakeholder ecosystems, Haroon will share strategies for mitigating disputes, safeguarding margins, and building resilient contracts that can withstand uncertainty.

    The broadcast will conclude with a live Q&A session, giving the audience the opportunity to engage directly with Ed and Haroon, and to take away actionable insights that will support their involvement in Saudi Arabia’s gigaprojects.

    Click here to register

    Hosted by: Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemicals market. He is considered one of the world’s foremost experts on the Mena projects market. He is a regular guest commentator on Middle East issues for news channels such as the BBC, CNN and ABC News and is a regular speaker at events in the region. 

    Haroon Niazi, partner, construction claims and expert services lead, International·HKA

    Haroon is a dual-qualified Chartered Quantity Surveyor (FRICS) and barrister with over 18 years of experience in the construction industry. He leads HKA’s Construction Claims and Expert Services Line across Europe, the Middle East, and Africa, overseeing a team of more than 200 consultants with responsibility for strategy and delivering the growth plan. His practice focuses on the resolution of complex and high-value construction disputes.   He has been appointed as a quantum expert and has delivered expert testimony in international arbitration and litigation, including in the Kingdom of Saudi Arabia. Haroon is known for his ability to analyse, quantify, and communicate the financial aspects of construction claims with clarity and independence.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16116602/main.gif
    MEED Editorial
  • Diriyah tenders media district north offices

    25 March 2026

     

    Saudi gigaproject developer Diriyah Company has tendered a contract inviting firms to bid for the construction of offices in the media district in the second phase of the Diriyah Gate development (DG2).

    The tender was released in March, with a bid submission deadline of 27 April.

    The scope covers the construction of five office plots comprising nine buildings, spanning over 50,000 square metres (sq m).

    The tender follows the Diriyah Company’s award of an estimated SR2.5bn ($666m) contract to build the Pendry superblock package in the DG2 area.

    The Pendry superblock encompasses the construction of a hotel, known as the Pendry Hotel, along with residential and commercial assets.

    The project will cover an area of 75,365 sq m and is located in the northwestern district of the DG2 area.

    In February, Diriyah Company awarded a SR717m ($192m) contract for the construction of the One Hotel, located in the Diriyah Two area of the masterplan.

    The project has a gross floor area of over 31,000 sq m.

    The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16114767/main.png
    Yasir Iqbal
  • Trojena terminates Ski Village steel structure contract

    25 March 2026

    Neom has terminated its contract with Malaysian contractor Eversendai Corporation for the steel structural works on the Ski Village project in Trojena, Saudi Arabia.

    In a statement published on its website, Eversendai said it had received an official notice that the termination will take effect from 26 March.

    Eversendai is jointly executing the construction works on the project with Riyadh-based contractor Albawani. The contract was formally awarded in March 2024.

    In July 2024, UAE-based steel producer Emirates Steel announced that it had signed a steel supply agreement for the Trojena Ski Village project.

    In January this year, Saudi Arabia confirmed the postponement of the 2029 Asian Winter Games, which were scheduled to be held at Trojena.

    Trojena had been chosen to host the event in October 2022.

    This latest public announcement comes shortly after Neom cancelled contracts for the construction of the tunnel sections of The Line in northwest Saudi Arabia.

    In a stock exchange announcement filed on 13 March, South Korean contractor Hyundai E&C said that Neom cancelled its contract on 29 December last year.

    Hyundai E&C was executing the drill-and-blast section of The Line’s tunnels in a joint venture with Greece’s Archirodon and South Korean counterpart Samsung C&T.

    These developments follow a wider strategic review of Neom last year, as Saudi Arabia reassesses priorities under its Vision 2030 programme. With tighter liquidity at the sovereign wealth fund level, resources are being redirected towards projects linked to the Fifa World Cup 2034, Expo 2030, and essential housing, healthcare and education initiatives.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16114360/main.jpg
    Yasir Iqbal