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The Government of Egypt is implementing projects that will expand irrigated areas on the Sinai Peninsula and in the southern desert. The projects will increase the annual demand for irrigation water in Egypt, while reducing the supply of Nile River water available to farmers in the Nile Delta. One goal of the projects is to reduce population pressure in the Delta by developing new communities in desert areas. The Government is encouraging private-sector investments in the projects, but substantial public funding also is being used to construct pumping stations, canals, and other facilities. The projects may impose opportunity costs and unintended consequences on agricultural production, rural development, and food security in the Nile Delta. The opportunity costs may include financial, hydraulic, political, and intellectual components, while unintended consequences may include reductions in agricultural wage rates in the Nile Delta and larger economic losses during sustained dry periods. Full consideration of opportunity costs and unintended consequences may be helpful in identifying complementary investments and policies that will increase the productivity of land and water resources, improve rural incomes, and enhance food security.