• The memorandum of understanding for debt swap with China International Development Cooperation Agency promotes the efforts of diversification of financing mechanisms through innovative instruments, which is aligned with the calls for developing the global financial structure.
• Expanding the scope of cooperation with China reflects the strength of our bilateral relations and the ongoing development of collaborative efforts since the signing of the Comprehensive Strategic Partnership agreement.
• Intensive negotiations have been conducted since the beginning of this year to coordinate with the Chinese side and the relevant national authorities to finalize the debt swap agreement.
Dr. Rania Al-Mashat, the Minister of International Cooperation, stated that the signing of a memorandum of understanding in the field of debt swap between the Ministry of International Cooperation and China International Development Cooperation Agency reflects the strength of the bilateral relations between the two countries, bound by historical ties of friendship that date back to ancient history. She also affirmed the ongoing development of collaborative efforts under the leadership of His Excellency President Abdel Fattah El-Sisi to achieve shared development and benefit from China's experience in development.
Dr. Rania Al-Mashat elaborated that Egypt has accumulated expertise and outstanding experience in debt swaps since the early 2000s with both Germany and Italy, while Egypt is the first country to sign a debt swap agreement with China International Development Cooperation Agency, aiming to diversifying financing mechanisms through innovative instruments.
During his visit to China to participate in the Belt and Road Forum, Dr. Mustafa Madbouly, the Prime Minister, witnessed the signing of a memorandum of understanding in the field of debt swap for development between Dr. Rania Al-Mashat, the Minister of International Cooperation, and Mr. Luo Zhao Hui, the chairman of China International Development Cooperation Agency.
The signing of the memorandum comes within the context of both sides desire to explore new horizons and areas of cooperation, aiming to enhance the comprehensive strategic partnership. Furthermore, the signing of the memorandum on debt swap for development reflects the commitment of both parties to strengthen cooperative bonds built upon the principle of Win-Win cooperation, while the economic ties between the two nations serve as a robust model for South-South cooperation.
The Minister of International Cooperation further emphasized that this memorandum of understanding represents a pioneering initiative by China International Development Cooperation Agency with a partner country, highlighting the depth of the ties between the two countries. It underscores the continuous evolution of the bilateral relations since the signing of the Comprehensive Strategic Partnership agreement in 2014 by the leaders of both nations, during President Abdel Fattah El-Sisi's visit to Beijing.
Dr. Al-Mashat also mentioned that the government adheres to the principles of governance and precise management of debt swap programs within the framework of international cooperation and developmental financing, aiming to maximize the benefits of these programs. The debt swap program with China International Development Cooperation Agency reflects the government's efforts to diversify the financing structure and enhance developmental and climate actions through collaboration with bilateral development partners.
Over the past few months, and in line with the presidential directives to enhance Egyptian-Chinese relations, the Ministry of International Cooperation conducted a series of consecutive rounds of Negotiations with the Chinese side across various arenas. This was particularly evident during Dr.Al-Mashat’s visit to Beijing, in July, to participate in the first high-level meetings of the global shared development forum. Additionally, bilateral meetings were held with Chinese financial institutions and government officials during the annual meetings of the African Development Bank and the Asian Infrastructure Investment Bank in Sharm El-Sheikh.
Since February 2023, the Ministry of International Cooperation has undertaken intensive rounds of negotiations with the Chinese side, in coordination with the relevant national authorities, to establish an unprecedented experience between the two countries. This experience the first between the Ministry of International Cooperation and China International Development Cooperation Agency in formulating a debt swap agreement for development.
Global Development Initiative (GDI)
During the visit of the Minister of International Cooperation to China in July 2023, negotiations regarding the debt swap program continued. Additionally, a memorandum of understanding was signed concerning the "(GDI) " with China International Development Cooperation Agency. This memorandum of understanding enhances the Egyptian-Chinese partnership and includes a provision for establishing a consultative mechanism at the administrative level. It also involves the development of a comprehensive strategy for developmental cooperation between Egypt and China over a period of 3-5 years for the first time. This strategy is formulated in light of the unique bilateral relations between the two countries and encompasses the areas and projects to be implemented through the developmental cooperation program.
Throughout the months of August and September 2023, continuous coordination meetings were held with relevant national authorities to discuss national priorities within the framework of the debt swap program. This occurred before the signing of the agreement during the visit of Dr. Mustafa Madbouly, the Prime Minister, to China in October 2023.
The Minister of International Cooperation affirmed her commitment to continuing coordination with the Chinese side and the relevant national authorities to move the debt swap agreement into implementation. This will further enhance joint development efforts, strengthen Egyptian-Chinese relations, and solidify Egypt's leadership in developmental endeavors.
The debt swap mechanism is a tool for enhancing available financing for implementing developmental projects by signing agreements through which a portion of the debts owed by development partners is being swapped to implement projects. This is done with the aim of alleviating the burden of external debt, achieving sustainable development by financing priority projects, and supporting efforts to achieve the seventeenth goal of the Sustainable Development Goals, which is "Partnerships for the Goals." Based on this mechanism, the local currency equivalent of the debt is utilized to finance mutually agreed-upon development projects.