Saudi Arabia and Egypt announced on Sunday that they have set up a $10 billion joint fund to develop a planned mega-city in the southern Sinai Peninsula, with Egypt committing more than 1,000 square kilometers (386 square miles) of land to the project.
Saudi Crown Prince Mohammed bin Salman first announced plans for the 26,500 square kilometer (10,230 square mile) zone at an international investment conference in Riyadh last October. Officials said public and private investment in the area is eventually expected to total $500 billion.
Known as Neom – from the Greek prefix "neo" (new) and the first letter of the Arabic word "mostaqbal" (future) – the mega-city is being billed as "the world's most ambitious project" and is intended to become a transnational city and economic zone. Prince Mohammed's stated objective for the project is to wean Saudi Arabia, the world's top crude exporter, off oil revenues.
The announcement came after the crown prince arrived in Egypt on Sunday to meet with Egyptian President Abdel-Fattah el-Sissi in an effort to deepen the alliance between two of the region's powerhouses.
It is Prince Mohammed's first public trip abroad since becoming heir last year and purging the kingdom's business and political elite in a crackdown on corruption that saw top princes and businessmen detained.
Relations between Egypt and Saudi Arabia have grown closer since el-Sissi took power in 2013 after ousting the Muslim Brotherhood, which both countries have banned and designated as a terrorist organization.
Egypt is a member of the Saudi-led coalition fighting Iranian-backed Shiite rebels in Yemen. Last year, el-Sissi ratified the handover of two strategic Red Sea islands to Saudi Arabia, triggering rare protests in Egypt.
Egypt also joined the Saudi-led boycott of the Gulf state Qatar last year.
The day before Prince Mohammed's visit, Egypt's top court dismissed all outstanding legal challenges to the deal on the Red Sea islands. El-Sissi's office also said "regional issues" and Egypt's fight against Islamic terrorists had been discussed by phone with U.S. President Donald Trump.
A Saudi official said Riyadh's part in the new joint investment fund will be cash to help develop the Egyptian side of Neom. The investment deal underlines the strategic ties between the richest Arab state and the most populous one.
The Saudi visit comes three weeks ahead of an election in Egypt in which former general el-Sissi is seeking a second term as president. He is guaranteed a win, with critics saying authorities have locked up opponents or forced them to halt their election campaigns.
As Egypt tries to keep a lid on any internal unrest, it has sided firmly with Saudi Arabia on key foreign policy issues, including the face-off between the Sunni kingdom and its Shiite foe, Iran.
Last June, Egypt enthusiastically joined Saudi Arabia and other Gulf allies in a trade and diplomatic boycott of Qatar, accusing its government and media of supporting the Muslim Brotherhood, hundreds of whose members Egypt has imprisoned and sentenced to death. Qatar has denied the charges.
The Saudi prince is scheduled to depart for Britain on March 7 after his three-day visit to Cairo. He is scheduled to visit the United States, Riyadh's closest Western ally, later this month.
