The head of Russia’s state industrial holding company said on Monday that Moscow had reached an agreement to deliver air defence systems to the Egyptian army.
Rostec chief Sergey Chemezov’s comments came in the wake of a visit to Cairo last week by Russian Foreign Minister Sergei Lavrov and Defence Minister Sergei Shoigu.
Mr Chemezov told Russia’s state-run RIA Novosti news agency that "some contracts (with Egypt) have already been signed — particularly one concerning air defence systems." He did not provide any financial details and did not specify which type of missiles the deal involved.
He said that the two sides were also discussing the delivery of Russian helicopters and jets.
Moscow’s Vedomosti business daily reported last Friday that the deals under discussion were worth more than $2bn and could be financed by Saudi Arabia.
Mr Chemezov said that Egypt’s new rulers were discussing funding options with their regional allies "and want to ask Russia to extend them a corresponding loan".
The Soviet Union was the main supplier of arms to Egypt in the 1960s and early 1970s, but co-operation declined after Israel and Egypt signed a peace treaty and Cairo began receiving US aid.
But Washington suspended some of its military aid to Egypt after the ousting of Islamist president Mohamed Mursi in July, and Moscow has been keen to fill the resulting void.
Yasser El-Shimy, an Egypt analyst with the International Crisis Group, told Reuters that the Russian ministers’ visit was meant to send a message to Washington.
"It’s meant to send a message to say Egypt has options, and that if the US wishes to maintain its strategic alliance with Egypt, it will have to drop the conditions it attaches to the military aid."
The US sends $1.3bn in military aid to Egypt annually, but announced on October 9 that it would suspend shipment of tanks, fighter aircraft, helicopters, missiles, and $260m in cash until Egypt demonstrated improvements in democracy and human rights.
An unanswered question is how Egypt would pay for the new arms. A key source of funding is probably Persian Gulf countries, Bloomberg reports. Egyptian officials are seeking financing from an unidentified Gulf country to buy as much as $4bn of Russian arms, Palestinian newspaper Dunia al-Watan reported on November 6, citing unidentified people familiar with the matter.
Saudi Arabia, the United Arab Emirates and Kuwait have pledged at least $12bn to Egypt’s new government.http://www.bdlive.co.za/africa/africanbusiness/2013/11/19/russia-confirms-egypt-military-deal