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  • Monday, 08 May 2023

All you need to know about development cooperation relations between the Arab Republic of Egypt and the World Bank Group

● The World Bank was established in 1944 and then turned into a multilateral group affiliated with a number of institutions to support development in developing countries.

● 189 member countries of the World Bank Group are represented on the Board of Governors.

● Egypt is a founding member, and the third largest shareholder in the Middle East and North Africa region of the World Bank Group.

● 175 projects the Bank has contributed to implementing since the inception of development cooperation relations with Egypt in 1959.

● $7.3 billion is the size of the development cooperation portfolio with the World Bank to implement 15 projects.

● The Multilateral Investment Guarantee Agency (MIGA) issued $470 million in guarantees for more than 17 projects.

● $1.5 billion in current investments by the International Finance Corporation (IFC) in Egypt to enhance the participation of the private sector in the fields of renewable energy, industry, education and the financial sector.

The relationship between the Arab Republic of Egypt and the World Bank Group (WBG) has been characterized by strong relations since its inception and over the decades, based on the development efforts exerted and the role played by the Bank to support development in emerging economies and developing countries. Following the launch of the Country Partnership Framework 2023-2027, the Ministry of International Cooperation reviews in the following report the most important aspects of the relationship with the WBG and its affiliated institutions.

What is the role of the World Bank Group and its affiliates?

The International Bank for Reconstruction and Development (IBRD) was established in 1944 to assist countries affected by World War II in reconstruction efforts, then it evolved from a single institution into a group that includes under it 5 development institutions to end poverty and promote common prosperity, and alongside the World Bank that addresses middle-income countries, following the WBG’s International Development Association (IDA), which supports the lowest-income countries through highly concessional financing, along with the (IFC) which enhances efforts to engage and empower the private sector and increase its investments, the (MIGA), and the International Center for Settlement of Investment Disputes (ICSID), which includes the Bank 189 countries are represented by Governors who contribute to the policy development of the World Bank.

When did the development cooperation relations between the Arab Republic of Egypt and the World Bank Group begin?

The Arab Republic of Egypt is one of the founding countries of the World Bank and the third largest contributor in the Middle East and North Africa region. The World Bank is one of Egypt's most important development partners, as it started supporting Egypt's development program in 1959 and since then, the Bank has financed 175 projects in Egypt, with a total of nearly $26 billion in many important sectors including infrastructure and capital, human rights, public sector reforms, service provision, and private sector development. These projects work to enhance  institutions, achieve economic reforms and sustainable development to ensure that future generations have the tools necessary to succeed and improve the quality of life for Egyptians.

When was the strategic partnership framework between Egypt and the World Bank approved?

The new strategy between the Arab Republic of Egypt and the World Bank Group for 2023-2027 will support future joint cooperation programs and projects. The CPF was approved on March 21, 2023 by the Board of Executive Directors of the bank, in order to support efforts to achieve comprehensive and sustainable growth, based on national priorities in various sectors and the development vision over the next five years, as the new strategy of the Bank is consistent with the Government’s of Egypt’s national initiatives and presidential initiatives, including Egypt's Vision 2030 and the National Climate Change Strategy 2050.

How is the new strategy reflected on development efforts in Egypt?

The new CPF aims to support the Arab Republic of Egypt in building innovative paths and sustainable solutions to address development challenges in various sectors, foremost among which is the eradication of poverty, the promotion of comprehensive prosperity for all segments of society, and the creation of conditions conducive to achieving comprehensive, sustainable and resilient green development. The Strategic Partnership Framework places the Egyptian citizen at the core of the development process in pursuit of three main objectives:  More and better private sector jobs: through supporting the creation of an empowering environment for private sector-led investments and job opportunities as well as creating a level playing field for the private sector; Enhanced human capital outcomes: through supporting the provision of inclusive, equitable and improved health and education services as well as effective social protection programs; and Improved resilience to shocks: through strengthened macroeconomic management, and climate change adaptation and mitigation measures. This is in addition to two cross-cutting themes: Strengthening governance & citizen engagement, and Promoting women’s empowerment.

How much do you record the size of the cooperation portfolio with the International Bank for Reconstruction and Development?

The number of ongoing projects funded by the International Bank for Reconstruction and Development amounts to 15 projects with a total value of $7.33 billion in various sectors including social protection, health, nutrition, population, education, environment, food security and urban development, which contributes to achieving economic reforms and sustainable development.

The development cooperation portfolio is divided into several sectors, namely financing, competitiveness and innovation, which accounts for 16% of the portfolio, social protection and employment promotion at 19%, health, population and nutrition at 13%, transportation at 11%, water at 12%, agriculture and food security at 7%, education at 7%, urban development and resilience at 7%, macroeconomics, trade and investment at 5%, environment, natural resources and blue economy at 3%.

What are the most prominent ongoing projects implemented in partnership with the World Bank Group?

The most prominent ongoing projects being implemented in partnership between Egypt and the World Bank are projects to support entrepreneurs and small and medium enterprises, the air pollution and climate change management project in Greater Cairo, the local development project in Upper Egypt, the project to support social protection efforts, among many others.

Is cooperation between Egypt and the World Bank limited to development funds?

The issuance of diagnostic and analytical reports is one of the most prominent areas of cooperation between Egypt and the World Bank in order to develop clear visions of the economy and analyze the current situation. During the past year, the Country Climate Development Report (CCDR) was launched, which identifies measures at the level of policies and investment opportunities that can be implemented within 5 years. It will lead to more efficient use and allocation of natural resources, reduce the effects of climate change on citizens, companies and business establishments, and enhance Egypt's ability to compete in global markets.

In addition to the Systematic Country Diagnosis (SCD), the private sector diagnosis report in Egypt in 2020, and the public expenditure review report in Egypt for the human development sectors in 2022, the Bank also launched the demographic report in cooperation with the Government of Egypt  in 2022.

What are the aspects of cooperation with the Bank in the development roadmap of the World Bank?

One of the most important topics discussed during the spring meetings in Washington focused on the development roadmap of the World Bank, where the Board of Executive Directors of the bank, in coordination with the bank’s management, prepared a development roadmap to better and more effectively address the size of the growing and accelerating development challenges. Egypt is an active participant in the discussion of the roadmap, in order to face development challenges, foremost of which is the increase in poverty rates worldwide, especially in middle-income countries, as well as common prosperity, a cross-border challenges, including climate change, epidemics, conflict and violence, as the bank believes that these challenges the ability  to achieve the primary mission in addressing poverty and achieving economic well-being, which will be reflected in achieving the SDGs. 

What are the axes for developing the role of the World Bank?

The World Bank's development plan is based on reformulating the Bank's mission to be "ending extreme poverty and enhancing shared prosperity by promoting sustainable, resilient and inclusive development", emphasizing the importance of defining sustainability and resilience and working to become more specific so that they include financial, social and environmental aspects, as well as developing indicators that reflect those terms and definitions.

The operational model pillars include three goals: supporting results at the country level in a way that addresses global challenges, increasing and improving the scope of development impact, and creating a stronger operational capacity to respond to crises.

The focus of the financial model includes enhancing the financial capacity of the bank and its financial model, in cooperation with various economic groups, including the G20.

How do relationships with the World Bank Group enhance private sector empowerment efforts?

In line with the country's vision and efforts to empower the private sector and broaden the base of its participation in achieving development, work is being done with the institutions affiliated with the World Bank Group, namely the IFC and the MIGA, to enhance investments for the private sector in various priority areas of development and to promote green financing. The IFC's investment portfolio in Egypt records more than $1.46 billion, directed to vital sectors such as renewable energy, industry, education, health, women's empowerment, and the financial sector.

Through cooperation with MIGA, more than $470 million in guarantees has been invested for 17 ongoing projects in the infrastructure, manufacturing and renewable energy sectors, and the Benban solar power plant is one of the most important projects funded by MIGA.

To download the World Bank Group's Country Partnership Framework with Egypt for FY2023-2027, click here.

To download World Bank Egypt 2023 Portfolio Snapshot, click here.

To download Egypt Country Partnership Framework for the Period FY2023-2027- Factsheet, click here.