UPDATE 2-Sudan says Qatar to deposit $1 bln as part of aid package

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KHARTOUM, April 2 (Reuters) - Qatar will deposit $1 billion at Sudan’s central bank, Khartoum said on Wednesday, announcing an aid package to Sudan’s Islamist government that is likely to worsen Doha’s already tense relations with Egypt.

The announcement by Finance Minister Badr El-Din Mahmoud came at the end of a visit to Khartoum by Qatari Emir Sheikh Tamim bin Hamad al-Thani, whose backing for the Muslim Brotherhood has frayed ties with Egypt and Gulf states that support the army-backed government in Cairo, including Saudi Arabia.

Mahmoud, speaking at Khartoum airport, said Qatar also planned to invest in large agricultural and energy projects in Sudan, whose economy has suffered since South Sudan broke away in 2011, taking with it much of Khartoum’s oil fields.

“Sudan realised big economic gains from the visit of the Emir of Qatar today,” he said.

Mahmoud said the deposit was the second part of an aid package but declined to give details of the first part. Sudan is vital to Egyptian interests because of its location upstream on the river Nile.

In a written statement, Sheikh Tamim said his visit “comes to confirm the two countries’ desire for continued dialogue and coordination on issues of mutual interest”.

Egypt has accused Qatar of meddling in its internal affairs and supporting the Muslim Brotherhood, the Islamist movement that was ejected from power by the army last year after mass protests against President Mohamed Mursi’s rule.

Cedric Barnes, Horn of Africa project director at the International Crisis Group, said the Qatari aid marked an extension of Doha’s long-standing support for the government in Khartoum and was an effort to prop up one of the last remaining “bulwarks of Brotherhood-style leadership in the region”.

The Brotherhood has long been viewed with suspicion by most Gulf states. Qatar’s backing for the Islamists has strained its ties with other Gulf states.

On March 5, in an unprecedented move, Saudi Arabia, the UAE and Bahrain recalled their ambassadors from Qatar, accusing Doha of failing to abide by an accord not to interfere in each others’ internal affairs. Qatar denies the charge. (Reporting by Khaled Abdel Aziz; Writing by Tom Perry; Editing by John Stonestreet and Sonya Hepinstall)