El Gouna is about to get a lot bigger: Orascom Development Egypt (ODE) has inked an agreement with Egyptian authorities to expand El Gouna, ODE said in an EGX disclosure (pdf) yesterday. Under the agreed master plan, the company will develop its remaining 17.4 mn sqm land bank, adding 1.2 mn sqm of connected lagoons and 1k hotel rooms every 10 years, it said..

This will more than double the town’s current size: El Gouna sits on a total land area of almost 37 mn sqm. Some 11 mn sqm have already been developed, according to ODE’s website.

Also under the agreement: The agreement also gives Orascom the right to connect its lagoon system to the sea, which it says will improve water quality for its Gouna residents. It will also push back the shoreline setback for its unbuilt landbank from the current 200 meters to 105 meters, increasing its buildable land.

The price tag: ODE will pay USD 112 mn in transfer fees for remaining plots, USD 21 mn upon signing and the remainder in installments over 15 years. The company is also paying USD 39 mn to settle with the Environment Ministry, which in 2021 fined it for allegedly causing environmental damage while constructing the resort town. The figure also includes payments to obtain environmental permits and approvals for the new developments.

Who’s paying? ODE will fund its growth from its own EGP 3.8 bn in cash on hand, a USD 30 mn shareholder loan from its parent company, Orascom Development, and future cashflows.