UAE-Sudan Engagement on Red Sea Port

UAE-Sudan Engagement on Red Sea Port

After several months of turmoil following a military coup last October, calm appears to have come back to the streets of Khartoum, the Sudanese capital. The dire economic situation of the country, paralyzed by unprecedented popular protests and riots that accompanied the fall of Omar El Bashir’s regime, has been further aggravated by the cut in international aid imposed since the military takeover. A recently published United Nations report also warns of a risk of famine which could affect no less than a third of the country's population owing to the multiple social, economic and political shocks that have destabilised Sudan in recent months.

To put an end to this economic instability, the government is endeavouring to rescue the economy by securing foreign direct investments. Over the past two weeks, multiple reports have indicated that the United Arab Emirates (UAE) is negotiating a USD 6 billion investment in the country, part of which is expected to be used for the reconstruction of the Red Sea Port.  Informed sources indicate that the Emirati and Sudanese authorities are discussing a possible Memorandum of Understanding (MoU) whose details are yet to be finalised. It will reportedly see the development of a free trade zone and agricultural projects. The UAE is also reported to have consented to a USD 300 million deposit to the country's Central Bank, which will allow the government to address the problem of lack of foreign currency.

The cost of building this port, the size of which should enable it to compete with Port Sudan, the country's main port, is estimated at USD 4 billion. If agreed, the project is to be jointly developed by DAL group and Abu Dhabi Ports. In addition to the free trade zone, the port is also expected to include a small airport and an industrial area similar to Dubai’s Jebel Ali. As for the agricultural projects, they represent a USD 1.6 billion investment and will be jointly developed by Abu Dhabi conglomerate IHC and DAL Agriculture in the city of Abu Hamad, in the north of the country. Abu Dhabi Fund for Development is also to invest USD 450 million in the construction of a 500 km long road which would link the 400,000 acres of farmland to the newly built port.

Initial discussions on the MoU concluded in July 2021. However, the October coup put the project on hold. Reports indicate that a new version of the project was agreed between UAE President Sheikh Mohamed bin Zayed and General Abdelfattah al-Burhan during the latter's official visit to Abu Dhabi last May.

In a statement, Abu Dhabi Ports said "[it had] not signed any agreements in relation to a joint project to build a port in Sudan," but "there are preliminary discussions taking place with the relevant authorities in Sudan."

Foreign investments and the jobs they will create are expected to allow Sudan to regain its political, economic and social stability, largely absent since 2019.

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