An area in Egypt has all the makings of a real Eldorado.
The area is located between the Nile and the Red Sea and has been tagged the “Golden Triangle” due to its triangular shape and development potential. It is particularly suited to tourism and is home to the most fruitful valley in the country, rich with mines of precious metals for industry. The Golden Triangle is also the name of the economic project that the Abdel Fattah al Sisi government launched and that has begun to take shape in recent months.
This is one of the key projects that the Egyptian government is focusing on to drive the country’s economic recovery. The triangle – destined to become a special economic area – is situated in Upper Egypt between the city of Qena in the hinterland, Sohag along the Nile, the two harbours of Safaga and Hamrawein on the Red Sea, and the city of El-Quseir on the coast. The 6,000 sqm will undergo development, including infrastructure works, and will have all the essentials – water springs, roads and electricity – to develop the economy and new urban areas. Forecasts predict that the local community will grow from its current 900,000 inhabitants to more than two million over the next 30 years.
The development project will involve various sectors, including agriculture, tourism, commerce and industry, especially the mining industry. The area is considered to be of particular value for tourism, as it is located along an ancient pilgrimage route to Mecca, which has numerous historical sites along the way. Agriculturally, the rainy Qena Valley is the widest valley in Egypt, has vast cultivable lands and is particularly suitable for aquaculture projects, especially the Safaga area which contains a wide variety of fish.
However, the government is counting most on the mining industry to exploit the Golden Triangle’s economic potential. The area is the richest in Egypt in terms of minerals – both metallic and non, such as iron, copper, gold, silver, granite and phosphates – and boasts 75% of the country’s mineral resources. The Golden Triangle offers opportunities to exploit phosphate for fertilisers, raw materials for cement produced from schist and limestone, gold ore and the production of petrol from oil shale.
The project, which had been on the back burner for some time, was revived in the summer of 2015, when the Egyptian authorities passed a law placing controls on mining as a means to engage the country’s resources more efficiently. To optimise economic returns, the government plans to make changes to the rules on land leases in order to streamline land concession procedures regarding land in the Golden Triangle and speed up feasibility study procedures. To this end, at the end of January 2017, the government approved a law establishing a special authority – independent from the Egyptian Mineral Resources Authority (EMRA) – to develop the area. An independent economic body was also recently established in Qena to manage the Golden Triangle. A first master plan for the project has already been drawn up by D’Appolonia S.p.A., a Genoa-based Italian engineering consulting company within the Rina Group.
The project – which will be developed under a 30-year plan divided into five-year phases – will be funded by international financial institutions and donors; USD 18bn in investment is predicted. The first phase of the project is set to cost USD 5.5bn, with 75% expected to come from private individuals.
Egypt is looking to strengthen its economy by increasing foreign investment flows to relaunch growth, and the Golden Triangle is one of the main projects to attract this foreign capital. On 1 April, President al Sisi approved the draft budget law and the socio-economic development plan for the 2016–2017 financial year (which will start on 1 July). The government is aiming for a budget deficit of 9.9% of GDP, compared to the current 11.5%, and GDP growth of 5.2%, up 4.4% on the previous financial year. For the first time the GDP is expected to reach over USD 337.9bn.
