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  • Tuesday, 06 February 2024

Everything you need to know about the partnership between the Arab Republic of Egypt and the Islamic Development Bank (IsDB) Group

The Islamic Development Bank (IsDB) Group includes 57 member countries from various regions of the world. Egypt is one of its founders and has a permanent seat on the Board of Executive Directors and is one of the seven countries that own the largest number of shares.

The Minister of International Cooperation, H.E. Dr. Rania A. Al-Mashat, welcomed the President of the Islamic Development Bank Group, Dr. Muhammad Sulaiman Al Jasser, at the headquarters of the Ministry of International Cooperation, in the New Administrative Capital.

In light of the visit of Dr. Sulaiman Al Jasser, we review in the following report the most important information about the Islamic Development Bank Group and the joint cooperation files.

When was the Islamic Development Bank established?

The IsDB was established as an international financial institution in accordance with the founding agreement concluded in August 1974 in the city of Jeddah in the Kingdom of Saudi Arabia. The inaugural meeting of the Board of Governors was held in July 1975, and the bank officially began its activities in October 1975.

What are the objectives of the bank and its affiliated institutions?

In 1975, the Islamic Corporation for the Insurance of Investment and Export Credit, the International Islamic Trade Finance Corporation, and the International Waqf Authority recently joined.

The bank works to finance productive projects and infrastructure projects with financial and economic feasibility using multiple financing tools, including Murabaha, Ijara, term sale, Istisna, capital contribution, good loans, and diminished participation, for medium and long-term terms. The Bank also provides technical assistance to prepare projects, institutional support, and transfer of technology and expertise for the benefit of member countries.

What are the most prominent affiliated institutions?

The Islamic Corporation for the Insurance of Investment and Export Credit was established in 1994 with the aim of expanding the scope of commercial transactions and investment flows between member countries of the Organization of Islamic Cooperation.

The Islamic Corporation for the Development of the Private Sector was established (November 1999) as an independent entity within the IsDB. The institution's mission is to complement the role of the Bank by developing and strengthening the private sector, as a means of economic growth and development in member countries.

The Board of Governors of the IsDB approved the establishment of the International Islamic Trade Finance Corporation at its meeting held in June 2005, and the terms of the agreement establishing the institution were approved during the annual meeting of the IsDB held in the year 2006 in Kuwait. The institution aims to enhance trade between Member countries of the Bank by providing trade financing and participating in activities that facilitate intra-regional trade and international trade.

How many member states does the bank have and its headquarters in different countries?

The bank includes 57 member countries from various regions of the world, and the basic conditions for joining it are: The nominated country must be a member of the Organization of Islamic Cooperation (formerly the Organization of the Islamic Conference), pay the first installment of the minimum for its subscription to the bank’s capital shares, and accept what the Board of Governors decided on. conditions.

The bank is headquartered in Jeddah (Kingdom of Saudi Arabia). It has 11 regional centers in Abuja (Nigeria), Almaty (Kazakhstan), Ankara (Turkey), Cairo (Egypt), Dakar (Senegal), Dubai (United Arab Emirates), Jakarta (Indonesia), Kampala (Uganda), and Paramaribo (Suriname) and Rabat (Morocco)

When did Egypt become a member of the Bank?

Egypt joined the Islamic Development Bank in 1974 as one of its founders and has a permanent seat on the Board of Executive Directors, as it is one of the seven countries that own the largest number of shares (357,965 shares). Egypt contributes to the bank’s subscribed capital at a value of 3.6 billion Islamic dinars (7.19% of Total subscribed capital), and has a voting power of 333,313 votes, or 7.13%. Since Egypt joined the bank, the bank’s participation in Egypt has focused on promoting comprehensive sustainable economic growth and reducing poverty by financing projects in infrastructure, supporting youth employment and creating new job opportunities. .

What is the working mechanism between Egypt and the bank?

In October 2018, the Egyptian government signed with the IsDB the framework document for the strategic partnership to be a basis for future dialogue between the Arab Republic of Egypt and the Bank Group from 2019 to 2021, which aims to harmonize the strategic plans of the Egyptian government and its development priorities in accordance with the 2030 sustainable development strategy for Egypt, as well as with the strategic directions of the Bank Group, and coordination is currently underway with the Egyptian ministries regarding reviewing the draft report for the midterm review of the partnership strategy in preparation for its issuance.

The strategy is based on four main pillars:

✓ Raising the efficiency of production elements with high added value, and enhancing their sustainability and quality, economically and environmentally.

✓ Reducing regional disparities and economic exclusion by addressing rural poverty by building basic infrastructure and increasing farmers’ productivity, by supporting integrated rural development projects.

✓ Developing and financing trade and supporting and developing the private sector, through financing and promoting trade, securing investment and export, and financing small and medium-sized companies.

✓ Capacity development through knowledge and experience exchange programmes, effective South-South cooperation and strengthening financing services.

How large is the cooperation portfolio between Egypt and the bank?

Egypt is one of the largest member countries benefiting from financing. The total number of projects that the Bank Group in the Arab Republic of Egypt contributes to financing is 382 projects in several sectors, including electricity, energy, agriculture, irrigation, education, health, industry, mining, information and communications, with total financing amounting to about $21 billion where the completion of 332 projects and 50 projects are being worked on.