Egypt secures EUR7.4bn aid package from the EU

Image courtesy Egyptian Presidency/ Getty Images

Egypt secured an $8.1bn (EUR7.4bn) deal on Sunday with the European Union (EU), weeks after the North African country clinched an expanded rescue programme from the International Monetary Fund (IMF) and a gargantuan $35bn investment from the UAE.

The new financial and investment package was signed during a visit by European Commission president Ursula von der Leyen and the leaders of Belgium, Italy, Austria, Cyprus and Greece.

It includes both grants and loans over the next three years.

“The partnership between the European Union and Egypt is of critical importance. We share strategic interests in stability and prosperity. Given your political and economic weight, as well as your strategic location in a very troubled neighbourhood, the importance of our relations will only increase over time,” said von der Leyen.

Glad to be in Cairo to mark a new milestone in the EU-Egypt strategic partnership.

With Egypt’s political and economic weight and its strategic location in a very troubled neighbourhood,

the importance of our relations will only increase over time. pic.twitter.com/531yNW6d0e

— Ursula von der Leyen (@vonderleyen) March 17, 2024

The funding program will prioritise economic stability, investments and trade as well as migration and security. von der Leyen said the EU will support the EU-Egypt Investment Conference in Cairo later this year.

Detailing the package, the EU said the funding program includes EUR5bn of concessional loans, EUR1.8bn of investments in projects related to renewable energy and food security and EUR600m in grants – a third of which is earmarked for “migration management.”

Egypt unlocks fresh funding

Meanwhile, Egypt and the IMF agreed to more than double the country’s rescue program to $8bn earlier in March, marking a culmination of recent global efforts to stabilise the economy of the Arab world’s most populous economy squeezed by geopolitical tensions and inflation.

Furthermore, the Abu Dhabi wealth fund, ADQ, agreed to invest $35bn in Egypt. The investment plans include developing a premium area on the country’s Mediterranean coast known as Ras El-Hekma – a project that authorities described as the biggest deal in his country’s history.

The North African nation is also set to receive $3bn from the World Bank, Finance Minister Mohamed Maait was quoted as saying by Bloomberg.

Moody’s changed Egypt’s outlook to positive from negative and affirmed its Caa1 rating, citing significant bilateral support that the country has received and policy steps taken in the past weeks including currency devaluation by more than 38 per cent and a record interest-rate hike of 600 basis points.

Read: Egyptians remit more money home after devaluation