Egypt and Saudi Arabia in February celebrated moving closer to activating a $1.8 billion electricity interconnection project, with final testing underway to integrate the country’s grids. The symbolism is fitting: This long-awaited power link is set to come online just as Cairo has been signaling alignment with Riyadh amid a major rift between Saudi Arabia and the United Arab Emirates — a fracture that also threatens to jolt Egypt’s ties with its single most important foreign investor. 

Since last December, tensions between Saudi Arabia and the UAE have spilled into the open over competing agendas spanning Yemen, Sudan and other regional flash points. For countries dependent on Gulf capital and political backing, this spat presents a delicate diplomatic challenge, but for Egypt the fissure places President Abdel Fattah al-Sisi in a major bind that could expose his country’s economy to new pressures. 

“Egypt is walking a bit of a tightrope in the Saudi-UAE dispute because, while it agrees with Riyadh on many geopolitical issues, it does not want to burn its bridges to the UAE because of substantial trade and investments from Abu Dhabi,” Gregory Aftandilian, a nonresident fellow at the Arab Center Washington DC, told Al-Monitor. 

Right now, Cairo seems to be successfully handling this dilemma. “But if push comes to shove, it will side with Riyadh, because geopolitically it has too much to lose,” added Aftandilian, pointing to issues including Sudan, the Red Sea and the Grand Ethiopian Renaissance Dam, the latter of which has imperiled Egypt’s water security.