AD Ports Group to invest in three Egyptian cruise terminals to boost tourism sector
Abu Dhabi Ports Group is investing in three cruise terminals in Egypt in a move that is expected to boost the country’s key tourism sector.
The $3 million investment is part of a 15-year concession agreement with the Red Sea Port Authority (RSPA) that covers the Safaga, Hurghada and Sharm El Sheikh ports.
A definitive agreement is expected to be finalised during the first quarter of 2024, AD Ports said. As part of the collaboration, AD Ports and the RSPA will provide new services, improve access for cruise operators and add new itineraries in the three ports, in addition to renovating Sharm El Sheikh terminal.
The move will be key in ramping up the Egyptian economy and AD Ports Group’s cruise business in the Red Sea region, “supporting volumes of cruise passengers and elevating passenger and cruise experiences”, the company said.
“This agreement is a testament to our commitment to fostering tourism in the Red Sea region, as well as strengthening the existing ties between the UAE and Egypt,” said Ahmed Al Mutawa, regional chief executive of AD Ports.
The travel and tourism sector contributed about $32 billion to Egypt’s gross domestic product in 2022 and employing about 2.4 million people, data from Statista shows.
In the same year, international tourist spending exceeded domestic spending for the first time since 2020, when the Covid-19 pandemic stalled economic activity, it added.
In the 2023 fiscal year, which starts in July, tourism revenue on the balance of payments hit a record $14 billion, supported by Egypt’s hosting of Cop27 in November 2022.
But the sector is expected to remain highly sensitive to exchange rate and inflation trends, as well as to the fallout from the Israel-Gaza war, S&P Global said in a recent report.
The UAE is Egypt’s second-biggest trading partner in the region while the North African country is ranked as the UAE’s fifth non-oil trade partner in the Arab region.
The new partnership between AD Ports and RSPA comes after their recent agreement to develop and operate a multi-purpose terminal at Safaga port in Egypt. As part of the agreement, AD Ports will invest $200 million over three years to develop the terminal.
AD Ports, listed on the Abu Dhabi Securities Exchange, has been expanding its operations and portfolio globally.
Last week, it said its Spanish operations division Noatum Terminals had acquired APM Terminals Castellon for €10 million ($11 million) in a move to strengthen operations in the western Mediterranean region.
In June, it signed a 50-year agreement with Pakistan’s federal agency, the Karachi Port Trust, to boost infrastructure at its eponymous port. It also signed a 30-year concession agreement with the Republic of Congo to manage and operate a multipurpose New East Mole Terminal in the city of Pointe-Noire.
Other deals announced last year include the acquisition of 10 offshore vessels for $200 million, as well as an €81 million deal with Spain’s Grupo Logistico Sese to buy its finished vehicles logistics business.
AD Ports inaugurated the Aqaba Cruise Terminal in Jordan last year, boosting the group’s Red Sea portfolio and cruise expansion strategy.