● Approval of $700 million in development policy financing (DPF) by the World Bank Board of Directors.
● Completion of an agreement worth €1 billion euros ($1.069 billion) with the EU under the Macro-Financial Assistance (MFA) framework to be signed during the Egypt-EU Investment Conference.
● Signing of financing agreements totaling $231 million, with $131 million from the African Development Bank (AFDB) and $100 million from the Korea Economic Development Cooperation Fund (EDCF).
● Ongoing discussions with the Asian Infrastructure Investment Bank (AIIB) to secure financing amounting to $300 million.
● H.E. Dr. Rania Al-Mashat “We aim to create complementarities across development partners, leveraging each’s comparative advantage,to push forward a common structural reform agenda that enhances the competitiveness of the economy, improves the business environment, builds macroeconomic resilience, and supports the green transition.”
After months of concerted efforts, theMinister of International Cooperation H.E. Dr. Rania A. AlMashat announced significant achievements following a series of negotiations with multilateral and bilateral development partners, in coordination with relevant national entities. These efforts focused on advancing the government’s economic and structural reform program, mobilizing budget support, strengthening macro fiscal resilience, improving competitiveness, as well as promoting the implementation of the State Ownership Policy (SOP) document. The budget support programs with the various development partners are underpinned by three pillars of reform: enhancing competitiveness of the Egyptian economy and improving the business environment, building macroeconomic resilience and stability and supporting the green transition.
The Minister of International Cooperation added that these efforts resulted in the mobilization of development financing worth approximately $2 billion, with €1 billion ($1.069 billion) from the European Union, scheduled to be signed during the Egypt – EU Investment Conference under the umbrella of the Macro-Financial Assistance (MFA). This is in addition to $700 million approved by the World Bank’s Board of Directors within the Development Policy Financing program, and concessional development financing from the African Development Bank (AfDB) worth $131 million, as well as financing worth $100 million from the Korea Economic Development Co-operation Fund (EDCF).
Development Policy Financing (DPF) with the World Bank
Within the framework of this program, on June 21, the World Bank approved financing worth $700 million, $500 million from the World Bank and $200 million from other partners. The loan period is 35 years, including a 5-year grace period and 30 years to pay, at the SOFR interest rate. This is within the framework of what the World Bank announced last March, to make $6 billion available to support economic and structural reform efforts in Egypt over 3 years, $3 billion for the government, and $3 billion for the private sector.
The Minister of International Cooperation explained that, in coordination with the World Bank and 8 national entities, including the Ministries of Finance, Housing, Justice, Electricity, the Competition Protection Authority, and the Information and Decision Support Center of the Council of Ministers, a number of policies have been implemented within the DPF, which aims to achieve 3 pillars: enhancing the competitiveness of the economy, building macroeconomic resilience and stability, and supporting the green transition.
Macro-Financial Assistance (MFA) with the EU
The upcoming agreement with the EU marks a significant milestone in Egyptian-European relations under President Abdel Fattah El-Sisi's leadership, following the €7.4 billion deal announced during the Egyptian-European Summit last March. Minister Al-Mashat announced that the first €1 billion tranche, to be disbursed in 2024, is part of €5 billion allocated for macroeconomic and budget support from 2024-2027. It will feature soft financing terms, including extended repayment periods and favorable interest rates. Details of the associated structural reform policies will be announced during the conference.
African Development Bank (AfDB) Financing
In the same context, during her visit to Nairobi, Kenya for the annual meetings of the African Development Bank, Minister of International Cooperation H.E. Dr. Rania Al-Mashat announced the signing of a $131 million agreement aimed at catalyzing private sector investments, facilitating economic diversification and supporting green transformation. The financing from AfDB spans 21 years, including an 8-year grace period.
Funding from the Korea Economic Development Co-operation Fund (EDCF)
Moreover, procedures are currently underway with the Korea Economic Development Cooperation Fund (EDCF) to finalize a $100 million financing agreement following the Minister of International Cooperation's participation in the Korea-Africa Summit in Seoul. The concessional financing features a 1.5% interest rate, and a20-year repayment period, including a 5-year grace period.
Furthermore, the Ministry of International Cooperation continues to engage with development partners to secure additional concessional financing. Current negotiations with the Asian Infrastructure Investment Bank (AIIB) aim to secure $300 million in financing to support Egypt's structural reform efforts.