Orascom Development Egypt (ODE) signs an agreement with the Egyptian government for the development of massive land plots in El Gouna city, Invest-Gate reports.
The signed agreement includes approval of a new master plan for an undeveloped land plot in El Gouna, with an area of 17.4 mn sqm, which incorporates approximately 1.2 mn sqm of connected lakes and 1,000 hotel rooms, for a period of 10 years.
The agreement also grants the company the right to connect its lake network to the sea through two new water channels to naturally improve the water quality in its current and future projects, which positively impacts the construction cost in the future.
The agreement between ODE and the government provides for modifying the beach area for the undeveloped plot of land from 200 meters to 105 meters, which enables the company to increase the structural component of lands overlooking the sea.
The agreement amends the fees (the right of the state) to dispose of real estate units for the total remaining undeveloped land area in El Gouna, provided that they are fixed for a period of 10 years and paid in advance over 15 years.
It grants environmental permits for 24 projects in El Gouna, settling all existing disputes with the Egyptian Environmental Affairs Agency (EEAA), and clearing the company of any claims.
According to the agreement, the value of the special disposal fees (the state’s right) for the remaining undeveloped land in El Gouna after the amendment amounts to $112 mn, of which $21 mn is paid upon signing, and the remaining balance in installments to be paid over a period of 15 years, with approximately $79 mn accruing between the 11th and 15th years.
The company also pays $39 mn upon signature in exchange for amending the beach’s precinct for undeveloped land in El Gouna from 200 meters to 105 meters, obtaining environmental permits for 24 projects, approving the digging of the two new water channels that connect the lakes network with the sea, and settling all existing disputes with the EEAA.
The mentioned amounts will be funded through the company’s cash balance, which amounts to around EGP 3.8 bn, a $30 mn loan from the parent company, Orascom Development Holding, and cash flows from future projects.
It is noteworthy that ODE records a net profit of EGP 858.3 mn pounds from the beginning of January until the end of last June, compared to EGP 744.6 mn in profits registered during the same period a year earlier.
The company’s total revenues reach EGP 3.8 bn by the end of June 2022, up from EGP 3 bn the year before.