Egypt mobilises $2 bln in budget support from IFIs and partners
The mobilised finances focus on advancing the government’s economic and structural reform program, mobilising budget support, strengthening macro-fiscal resilience, improving competitiveness, and promoting the implementation of the State Ownership Policy (SOP) document.
Underpinning the budget support programs with the various development partners are three pillars of reform: enhancing the competitiveness of the Egyptian economy and improving the business environment, building macroeconomic resilience and stability, and supporting green transition.
Al-Mashat explained that these efforts resulted in mobilizing development financing worth approximately $2 billion, including €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). The two-day conference kicks off on Saturday.
Furthermore, Egypt will receive an additional $700 million approved by the World Bank’s Board of Directors within the Development Policy Financing program. Egypt will also receive concessional development financing from the African Development Bank (AfDB) worth $131 million and financing worth $100 million from the Korea Economic Development Co-operation Fund (EDCF).
Egypt engages in an Extended Fund Facility (EFF) loan programme worth $8 billion, which focuses mainly on levelling the field between the public and private sectors to reduce the state's footprint in the country's economy. Under the programme, Egypt is also committed to divesting from a group of state-owned assets. Fifty percent of the proceeds of the sales of these assets will be dedicated to containing the high level of debt that hit 98 percent of GDP in the last FY2022/2023.
Development Policy Financing (DPF) with the World Bank
Within the framework of this program, the World Bank approved on 21 June financing worth $700 million: $500 million from the World Bank and $200 million from other partners. The loan period is 35 years, including a five-year grace period and 30 years to repay at the secured overnight financing rate (SOFR) interest rate.
This aligns with the World Bank's announcement, in March, of $6 billion available to support economic and structural reform efforts in Egypt over three years. The funding will be split between the government and the private sector so that each receives $3 billion.