Saudi Arabia has agreed on a $10 billiom investment with Egypt for a futuristic mega city project.
Saudi Crown Prince Mohammed bin Salman visited Egypt on Monday to discuss issues focusing on economic cooperation.
Prince Mohammed accompanied Egyptian President Abdel Fattah al-Sisi to review construction projects near the Suez Canal before boarding a boat with the president to tour the waterway.
A Saudi government source said the two countries had agreed to set up a joint $10 billion fund to develop areas of Egypt linked to the NEOM project.
The $500 billion NEOM mega city, unveiled by Prince Mohammed last year, is planned to be a biotech and digital hub spread over 26,500 square kilometres in an area facing Jordan and Egypt.
The Saudi government source said the joint fund, which involves leased land for the Egyptian share, would be used to develop lands in the south of the Sinai Peninsula as part of NEOM.
Prince Mohammed, who landed in Cairo on Sunday, is to fly to Britain on Wednesday and later this month to the US, in his first foreign tour as crown prince.
His visit to Egypt deals with “economic and investment cooperation,” Egyptian presidency spokesman Bassam Radi told state television.
Prince Mohammed and President Sisi agreed in talks to bolster economic ties and launch joint projects, “particularly in the tourism sector on the Red Sea,” Mr Radi said.
Saudi Arabia views Egypt as a cornerstone of regional stability, after former army chief Sisi overthrew his Islamist predecessor Mohamed Morsy in 2013.
Riyadh viewed Morsy’s Muslim Brotherhood with suspicion and at one point briefly recalled its ambassador from Cairo during his turbulent year in power.
It has since showered Cairo with aid to prop up the country’s economy, in a relationship that has led to some controversy in Egypt.
In 2015, during a visit by King Salman to Cairo, the two countries agreed on the transfer of two Red Sea islands to Saudi Arabia, sparking protests in Egypt.
President Sisi ratified the deal last year, and Egypt’s top court annulled lower court rulings for and against the treaty on the eve of the crown prince’s arrival.
Prince Mohammed’s visit comes ahead of Egypt’s presidential polls in late March, with President Sisi expected to win a second four-year term.
The visit “will be interpreted as proof of Saudi support for Sisi to remain as the president of Egypt,” Mostafa Kamel al-Sayed, a political science professor at Cairo University, said.
Cairo and Riyadh have maintained close ties, although Egypt has signalled a lack of enthusiasm for Saudi regional policy, both on the Yemen war and a potential escalation with Iran