Egyptian President Abdel Fattah al-Sisi and King Salman of Saudi Arabia shake hands during the reception ceremony in the Egyptian Presidential Palace in Cairo - Photo from the presidency
CAIRO (Reuters) - Saudi Arabia is to provide Egypt with 700,000 tonnes of petroleum products a month under a $23 billion (16 billion pounds) deal over five years between Saudi Aramco and the Egyptian General Petroleum Corp, an EGPC official said on Monday.
"The Saudi Fund for Development will pay Aramco for the petroleum products directly, and receive in return the amount from Egypt in instalments," the source told Reuters.
The deal is part of financial support for Egypt announced during a visit this month by Saudi Arabia's King Salman.
It also highlights a change in strategy by Saudi Arabia to focus more on financial support for Egypt that will also provide Saudi Arabia with a return on its investment.
Egypt will get financing for the products but will have to repay the money.
Saudi Arabia, along with other Gulf oil producers, has pumped billions of dollars, including grants, into Egypt's flagging economy since the toppling of President Mohamed Mursi of the Muslim Brotherhood in 2013 after mass protests against his rule.
Low oil prices have contributed to Saudi Arabia's change of approach.
Under the 700,000-tonne monthly supply deal, Saudi Aramco will provide Egypt with 400,000 tonnes of gas oil, 200,000 tonnes of benzene and 100,000 tonnes of Mazut, the source said.
The financing for the petroleum and petroleum products will have an interest rate of 2 percent and will be repaid over 15 years, the source said.
(Reporting by Ehab Farouk; Writing by Asma Alsharif. Editing by Jane Merriman)