Egypt and South Korea sign $460m deal to help fund Cairo metro

Latest deal follows up on last year’s agreement between National Egyptian Railway Industries Company and Hyundai Rotem

Egyptian Minister of International Co-operation Rania Al Mashat and South Korean ambassador to Egypt Kim Yong-Hyun at the signing ceremony. Photo: Egyptian Ministry of International Co-operation

Egypt has signed a $460 million financing agreement with South Korea under which trains will be supplied for the second and third lines of Cairo’s metro, the Egyptian Ministry of International Co-operation said on Tuesday.

Under the deal, Egypt will be supplied with 40 trains comprising 320 carriages.

Finance will be provided by the Economic Development Co-operation Fund of Korea, an arm of the Export-Import Bank of Korea, the ministry said.

While a portion of the supplied carriages will be imported directly from South Korea, others will be manufactured domestically through a partnership signed by the National Egyptian Railway Industries Company (Neric) and South Korean manufacturer Hyundai Rotem last year.

The two companies signed their first deal in August, worth $656 million, also to supply 40 trains with a total of 320 carriages.

The two companies had signed a deal in May 2021 and a framework agreement six months later to launch a partnership whose primary aim is to localise the manufacture of rolling stock in Egypt, the country’s transport ministry said at the time.

Last year, a project plan released by the ministry said the partnership aimed to provide the country’s railway system with 25 per cent of its carriage needs by next year, with the aim of pushing it to 50 per cent two years later and 75 per cent two years after that.

Under the Neric/Hyundai Rotem agreement, a joint manufacturing plant is expected to be built in the Suez Canal Economic Zone, which when complete could provide 5,000 jobs for Egyptians, the Ministry of Investment and International Co-operation said on Tuesday.

The South Korean side pledged to provide equipment and expertise to Egypt to help bring the plan to fruition.

Neric is a venture launched in 2020 between the Sovereign Fund of Egypt, the Suez Canal Economic Zone, the Transport Ministry, East Port Said Development, Hassan Allam, Samcrete and Orascom Construction.