The Egyptian parliament approved four financing agreements worth $332 million to complete the Light Rail Transit (LRT) project, while the session witnessed objections from MPs who demanded a halt to the borrowing policy, warning of the worsening burden of public debt, whose servicing costs passed the threshold of 80% of total government revenue during the period from July 2025 to January 2026.
Parliament’s approval came days before a speech by Egyptian President Abdel Fattah El-Sisi, in which he expressed his rejection of continued reliance on borrowing to meet citizens’ needs, saying that “it is neither logical nor fair for us to continue borrowing in hard currency to cover these needs, and this applies as well to gas and other commodities, along with the need to provide petroleum products to run power stations and factories”.
The government and a number of MPs loyal to it defended the project, saying it serves as a vital artery linking the Administrative Capital with the industrial zones, while parliamentary criticism mounted, questioning the point of spending billions on “stations in cities where nobody lives” at a time when the main roads in the governorates are suffering from deterioration and economic burdens are increasing as a result of the worsening public debt.
The total of the agreements amounted to about $332 million, allocated to completing the third phase of the Light Rail Transit (LRT) project, which links the New Administrative Capital with 10th of Ramadan City. This phase extends from the Arts and Culture station to the Central Capital station over a length of 20.4 kilometres, according to government reports.
In the details of the agreements, the House approved Presidential Decree No. 652 of 2024 on the framework agreement for a concessional loan worth 1.465 billion Chinese yuan, and Decree No. 479 of 2025 on a concessional loan agreement worth $200 million (to be repaid in Chinese yuan).
The financing is provided by the Export-Import Bank of China, guaranteed by the Ministry of Finance, on concessional terms that include an annual interest rate of 2%, while the repayment period extends to 20 years, including a grace period of 5 years, with the government committed to a set repayment schedule.
Heavy Debts
Opposition MPs considered that spending billions on roads in “cities where nobody currently lives” represents a flaw in spending priorities. In this context, MP Maha Abdel Nasser, a member of the House of Representatives for the Egyptian Social Democratic Party, says that her main objection to financing the third phase of the light rail project stems from the fact that the project is not a pressing priority at the present time.
She tells Zawia3 that the global geopolitical crisis and the rise in oil prices have increased the burden of living costs on citizens, which makes spending billions on the project out of proportion to the current economic reality.
Maha points out that the third phase includes four stations inside the New Administrative Capital, but she considers this step unjustified at present, because the capital still lacks a sufficient population mass to call for mass transport on this scale.
She also criticises the policy of massive borrowing to finance this phase, noting that the total cost amounts to EGP 32 billion, half of it loans, and that completing the route to reach 10th of Ramadan City will require an additional half a billion dollars.
The MP continues that all these loans will increase the burden of debt service, which already devours more than two-thirds of government spending, and that there is still no clear vision for how to deal with these accumulated debts, and that the government continues to borrow huge sums for non-essential projects despite its statements about the existence of committees to reduce the debt.
Regarding the government’s response to the MPs’ objections, Abdel Nasser explains that the official justification is that the project has already begun and must be completed, which she describes as “a logic that ignores the actual economic reality”. She expresses her surprise at the approval of the loans by some MPs counted among the opposition, such as MP Diaa El-Din Dawoud, stressing her complete disagreement with this approach.
The MPs also voiced their rejection of the absence of actual oversight over the external borrowing file. They stressed that expansion in luxury transport projects, such as the monorail and the light rail, increases the pressure on foreign currency reserves and increases the fragility of the economic situation in the face of external shocks, instead of directing resources towards productive sectors that generate real and sustainable income.
For his part, opposition MP Diaa El-Din Dawoud, a member of the House of Representatives, explained during his speech in parliament that he was approving the loans for the first time because the project is linked to an existing development plan, stressing that completing it is a necessity to avoid the stalling of ongoing projects, especially with the urban expansion in the New Administrative Capital, and to ensure the development of infrastructure, particularly transport and road networks.
In recent years Egypt has witnessed a sharp rise in the burden of public debt service, amid an increase in total external debt, which reached about $163.7 billion in September 2025, up by about $8.6 billion since the beginning of 2024.
What Is the Point?!
The light rail train runs on electric power, as power lines are placed above it, and it contains an energy storage device such as a battery or a supercapacitor.
The operation of the first and second phases of the light rail project began on 3 July 2022. The line extends from the Adly Mansour interchange station in the El Salam area in east Cairo to the City of Arts and Culture station in the New Administrative Capital, with a total length of 68.8 kilometres, and includes 12 stations (11 surface stations and one elevated station).
Meanwhile, expansion work on the project continues through the third phase, which extends south from the Cathedral of the Nativity station to the Central Capital station over a length of about 20.4 kilometres, and includes four stations, among them stations serving main areas inside the Administrative Capital such as the International Sports City.
The government plans to implement the fourth phase to extend the line north to 10th of Ramadan City over a length of nearly 16 kilometres, with the aim of strengthening the connection between the new cities and mass transport in Greater Cairo.
For his part, Mohamed Ramadan, economic researcher at the Egyptian Initiative for Personal Rights, considers that the project has environmental and economic advantages, such as linking the new cities and reducing emissions, but he points out that the assessment of the final economic feasibility depends on the government itself, and that parliamentary discussions on project priorities often do not include full transparency about financing and economic studies.
Ramadan tells Zawia3 that continued borrowing to finance these projects multiplies the burden of external debt, especially since large projects such as the electric train do not generate quick dollar income capable of confronting the current debt crisis.
The economic researcher adds that the lack of transparency in announcing the details of projects, their cost and their financing reduces the ability of MPs and observers to assess the feasibility of projects, stressing that infrastructure alone is not enough to guarantee economic development, and that the real problem lies in the mechanism of decision-making and the planning of major investments, and not only in the project itself.
In a report titled “Will Egypt Get Out of the Sea of Sand?” issued by the Egyptian Initiative for Personal Rights, the initiative explained that the public debt crisis lies in the state entering a “vicious circle” of borrowing, as about 58% of the new borrowing planned in the budget is allocated solely to paying the instalments of previous loans.
The report noted that these loans were used mainly to cover the gap between revenue and expenditure, and to finance major infrastructure projects such as the New Administrative Capital, the high-speed train and the monorail, projects which the initiative considered do not generate quick dollar income and do not meet citizens’ basic needs.
In addition, the cost of servicing external debt doubled as a result of the repeated devaluations of the Egyptian pound, which were part of the conditions of international institutions for obtaining more loans. The worsening debt burden led to debt-service allocations (instalments and interest) taking up about two-thirds of government spending, at a rate reaching 64.8%, which significantly narrowed the space available for social spending, according to what was stated in the report.
The report noted that debt interest alone consumes about 11.2% of gross domestic product, a share that exceeds the total allocations directed to workers’ wages, subsidies, education and health combined. As a result of this imbalance, real spending on vital sectors declined to below the constitutionally mandated levels, which contributed to the continued deterioration of living standards for most Egyptians as a result of austerity policies directed at serving creditors.
Billions in Debt for Security Purposes
Recent years have seen the implementation of a number of major road and axis projects aimed at strengthening the connection between the New Administrative Capital and the surrounding cities in Greater Cairo and the cities of the eastern Delta, relying on external financing through obtaining a number of loans.
The total cost of financing the Light Rail Transit (LRT) project consisted of a package of international loans and local contributions that exceeded $1.6 billion in the period from January 2019 to March 2026.
The project relied mainly on concessional financing from the Export-Import Bank of China, which included $1.239 billion for the first and second phases, implemented through two financing agreements that include a government loan worth the equivalent of approximately $674 million, in addition to another concessional loan from the Chinese Ministry of Commerce worth $53 million, with long repayment terms of about 20 years and grace periods ranging between 2 and 10 years, at concessional interest rates of around 1.8–2%.
In September 2023 the Export-Import Bank of China approved additional financing worth $400 million to cover the costs of the third phase of the project, allocating these funds to cover the electromechanical technical works and the signalling, communications and central control systems. This is the financing that parliament approved in March 2026 as part of a package of financing agreements worth $332 million.
From the light rail to the monorail project, one of the modern mass transport projects in Egypt, which includes two monorail lines linking the New Administrative Capital with Nasr City and 6th of October City. The total cost of the project (including construction, basic infrastructure, systems and operating regulations over decades) was estimated at about EUR 4.5 billion.
The monorail project relied mainly on an international loan worth EUR 1.88 billion, provided by a consortium of global banks led by J.P. Morgan, guaranteed by UK Export Finance, which alone contributed about GBP 1.7 billion. In addition, the National Authority for Tunnels borrowed about EGP 5 billion from Egyptian (local) banks in 2025, to cover the construction and civil works carried out by Orascom Construction and The Arab Contractors.
Alongside the monorail and the light rail, the Egyptian government established the high-speed electric train project to link the New Administrative Capital and the Ain Sokhna area to Alexandria and the Mediterranean Sea, with total loans estimated at EUR 2.9 billion, divided between financing through international institutions of about EUR 2.26 billion, a direct loan from the Islamic Development Bank worth EUR 318 million, and other ongoing negotiations with international financial institutions to expand the financing to the second and third lines within the national network.
In May 2023, President Abdel Fattah El-Sisi issued Decree No. 145 of 2023 approving the financing agreements for the first line of the high-speed electric train network. These agreements included loans from several European banks, guaranteed by the German export development agency, amounting to EUR 1,990 million, in addition to a loan guaranteed by the Italian export development agency worth EUR 268.8 million, to cover the cost of building the first line of the high-speed electric train network between Ain Sokhna, Alexandria, El Alamein and Marsa Matrouh.
In February 2024 the government signed an agreement with the Islamic Development Bank to obtain a loan worth EUR 318 million allocated to building the same first line, and the president ratified this loan by publishing Decree No. 219 of 2024 in the Official Gazette, after the approval of the House of Representatives in January 2025.
Akram Ismail, a leading figure in the Bread and Freedom Party (under formation) and the Civil Democratic Movement, considers that the New Administrative Capital was designed according to security standards aimed at moving government institutions away from the heart of Cairo, which led to the isolation of the city and the absence of any ability to develop it as an integrated urban residence.
He explains that the absence of housing and basic services for employees forced the government to build huge transport networks to facilitate workers’ access to their workplaces, stressing that the project is closer to being an administrative city than an actual living city.
The political leader adds, speaking to Zawia3, that the massive investment in iconic towers and luxurious infrastructure makes backing away from the project difficult, and forces the government to continue borrowing to activate transport projects and link the capital to neighbouring cities, in the hope of bringing the city to life, as backing away from the project has become completely out of the question.
Ismail points out that the architectural character of the towers and the high prices are not commensurate with the actual needs of the city, and do not achieve sufficient economic value to cover the loans and the costs of developing roads and infrastructure.
He stresses that the expected economic return from moving the ministries and the Central Bank to the capital is extremely limited, given that these areas are not productive, and that any potential income from renting offices or some companies will not be enough to repay the loans, which makes the project a large strategic investment without a tangible immediate economic return.
While major transport projects, such as the light rail, the monorail and the high-speed train, represent a vital artery linking the New Administrative Capital with the surrounding cities and areas, their huge costs and the loans that have exceeded billions of dollars raise questions about their economic feasibility and their capacity to service the public debt.
