Egypt banks on getting a major slice of south Lebanon's reconstruction

Egypt is doubling down on Lebanon, not just as a mediator to end Israeli strikes in the south, but as a leading partner in reconstruction.

A pledge to this effect came during the first Egyptian-Lebanese Joint Higher Committee in six years, convened in Cairo on Sunday.

Egyptian Prime Minister Moustafa Madbouli told visiting Lebanese counterpart Nawaf Salam that Egyptian construction firms are "on standby" to begin work in southern Lebanon the moment a political deal is sealed and Israeli attacks stop.

"Egyptian companies are ready to push reconstruction forward as soon as the problems in southern Lebanon come to an end," the Egyptian premier said.

In parallel meetings, Foreign Minister Badr Abdelatty and Madbouli condemned Israel's persistent violations of Lebanese sovereignty, including airstrikes and the occupation of five hilltop positions.

They reaffirmed full support for Beirut's efforts to centralise security under UN Resolution 1701 of 2006.

Egypt's interest in broadening cooperation with Lebanon is not new. Nonetheless, the latest surge in this interest is inseparable from Cairo's geostrategic, security and economic calculations, observers in Cairo and Beirut said.

These calculations are fuelled by current regional and international developments and Egypt's regional ambitions, they added.

Mediation model

Egypt's push builds on its recent diplomatic win, namely co-brokering the October 2025 Gaza ceasefire in the Red Sea resort of Sharm el-Sheikh with Qatar, the US, and Türkiye, following intense Hamas-Israel talks.

Now, Cairo is applying the same playbook to Lebanon.

Just days before the higher committee convened in Cairo, Egypt's intelligence chief, Maj. Gen. Hassan Rashad, made a high-stakes visit to Beirut.

He met President Joseph Aoun, Prime Minister Salam, and Speaker Nabih Berri, reportedly carrying a formula to halt Israeli attacks and stabilise the border.

The move aligns with US President Donald Trump's broader regional settlement vision, analysts say, with Egypt leveraging its unique access to Beirut, Tel Aviv, Washington and Tehran.

"I strongly believe that Egypt can succeed in helping Israel and Lebanon to reach an understanding that brings an end to Israeli aggressions in the south," Lebanese political analyst, Mohamed Said al-Rezz, told The New Arab.

"Egypt has credible contacts with all parties to the Lebanese problem," he added.

Egypt historically supported UN resolutions, including 1701, which calls for Hezbollah's disarmament south of the Litani River and Israeli withdrawal from southern Lebanon.

It also leveraged its influence in the Arab League to push for the implementation of this resolution over the years.

In pushing for the implementation of this resolution, Egypt seeks to prevent spillover effects on regional security.

Egypt has learned the lesson of the Gaza war the hard way, with Israeli attacks on the Palestinian territory in the past two years, reflecting negatively on its economy, including by energising Houthi attacks on Red Sea shipping.

Meanwhile, the latest Egyptian push for an end to Israeli attacks in Lebanon aims to create links with the calm in Gaza.

Nevertheless, this Egyptian bid faces several challenges, analysts said.

Persistent Israeli attacks on southern Lebanon are one of these challenges, standing as an impediment to dialogue between Beirut and Tel Aviv, the same analysts added.

"Israel does its best to evade any peaceful settlement of its conflict with Lebanon, given the fact that Israeli Prime Minister Benjamin Netanyahu cannot live without wars or massacres," al-Rezz said.

"This man could not achieve any of his war goals either in Gaza or in Lebanon," he added.

Other challenges include Hezbollah's resilient structure, despite heavy losses to its infrastructure.

Lebanon's fragmented politics and the need for synchronised US, French, and UNIFIL pressure are other challenges, analysts said.

Economic stakes

Current Egyptian mediation efforts draw on the role Egypt played during the 2023-2024 Israeli war on Lebanon, which displaced over 1.2 million Lebanese and caused $14 billion in damages, per UN and World Bank estimates.

Maintaining these efforts now highlights Cairo's pivot from a Gaza-centric focus to a holistic regional stabiliser role. However, full resolution hinges on Israeli-Lebanese concessions and international support, analysts said.

The same efforts are also apparently driven by economic calculations. Egypt maintains several economic interests in Lebanon, ones manifested in bilateral trade, direct investments, and strategic reconstruction opportunities.

These ties are part of Egypt's broader regional economic diplomacy, particularly amid Lebanon's recovery from its 2019 financial crisis and the latest Israeli war on Lebanon, specialists in Cairo said.

"There are vast opportunities for economic cooperation between Egypt and Lebanon," Alia al-Mahdi, the former dean of the College of Economics and Political Science in Cairo University, told TNA.

"Egypt can offer Lebanon a lot, especially after Lebanon gets over its current problems," she added.

The two countries share a modest but growing trade relationship, with Egypt enjoying a significant surplus.

Trade is facilitated through the Pan-Arab Free Trade Area, which includes both countries and reduces tariffs on goods like agricultural products and building materials.

Bilateral trade hit $1 billion in 2024, up 29% from $774 million in 2023, with Egypt running a substantial surplus in citrus, clothing, chemicals, and building materials—all critical to Lebanon's recovery.

Madbouli said trade could "easily double to $2 billion" through private-sector momentum, with a planned visit to Beirut in December to seal new deals.

His visit to Beirut is expected to help Egyptian companies have a significant stake in the reconstruction of southern Lebanon.

Egyptian Development and International Cooperation Minister Rania al-Mashat said Egyptian companies have the necessary expertise to participate in the reconstruction of southern Lebanon.

"These companies participated in national megaprojects here, including the construction of agricultural and industrial communities and modern urban communities," the Egyptian minister said during a meeting with Lebanese Minister of Economy and Trade, Amer Bisat, in Cairo on 2 November.

During the higher committee meeting, Egypt and Lebanon signed 15 new memoranda of understanding, covering energy, IT, health, agriculture, and transport.

During his meeting with Salam, the Egyptian premier highlighted his country's aspirations for closer cooperation with Lebanon.

"This is a strategic partnership for a better future—for Lebanon, for Egypt, and for the region," the Egyptian premier said.

With Egyptian boots on the ground in diplomacy and soon, perhaps, in construction, Cairo is betting big that peace and profit can go hand in hand, Egyptian analysts said.

"Egyptian companies stand a big chance to participate in Lebanon's reconstruction, especially after Egypt helps broker a settlement of the conflict between Lebanon and Israel," al-Mahdi said.

"In doing business with the Lebanese, Egypt will find willing and proficient partners, given the excellent track record of Lebanese companies," she added.