World Bank announces $700m in financing for Egypt

The World Bank announced on Monday the approval of a $700m budget support package for Egypt, marking the first tranche of a comprehensive $6bn programme, to be disbursed over the next three years.

The $700m package is designed to help Egypt boost private sector participation, macroeconomic and fiscal resilience, and a greener growth trajectory, the World Bank said in a statement.

This financial injection comes amid a surge of foreign financing aimed at stabilising and revitalising Egypt’s economy.

A multi-pronged approach to boosting Egypt’s economic stability

The World Bank’s initiative, titled “Generating Resilience, Opportunities, and Welfare for a Thriving Egypt” Development Policy Financing (DPF),  is designed to address immediate economic challenges while laying the groundwork for long-term structural reforms.

The DPF aims to enhance private sector participation, strengthen macroeconomic and fiscal resilience, and facilitate a green transition.

The plan includes significant investments in renewable energy and efficiency improvements in critical sectors like electricity, water, and sanitation, supporting Egypt’s commitment to sustainable development and climate resilience.

Rania Al-Mashat, Egypt’s Minister of International Cooperation, praised the DPF as a crucial step towards achieving Egypt’s economic and environmental goals.

“This programme aligns perfectly with our national objectives,” she stated. “It will drive us toward a more competitive, green, and private sector-driven economy, supporting sustainable growth and inclusivity for all Egyptians,” she added.

Key initiatives

The $700m support will fund a series of targeted reforms, including:

• Governance of state-owned enterprises: Enhancing transparency and efficiency to ensure these entities contribute positively to the economy.
• Empowerment of Egypt’s competition authority: Strengthening the body’s ability to combat monopolistic practices and foster fair competition.
• Improved tax collection: Streamlining processes to increase revenue and reduce fiscal deficits.
• Climate adaptation: Reducing energy waste and implementing measures to mitigate and adapt to the impacts of climate change, including establishing a framework for trading carbon credits.

The World Bank projects that these initiatives will create jobs, strengthen the economy, and enhance Egypt’s resilience to environmental and economic challenges. The ultimate goal is to build a more sustainable and inclusive economic future for the country.

IMF, EU and UAE support

The World Bank’s announcement follows a series of significant financial agreements and investments for Egypt this year.

Egypt reached a staff-level agreement with the International Monetary Fund (IMF) for the third review of an expanded loan programme, earlier this month. This agreement will unlock $820m upon approval by the IMF’s executive board, part of an extended $8bn facility.

Earlier this year, Egypt secured a monumental $35bn investment deal with the Abu Dhabi sovereign fund ADQ to develop a coastal project 200 km west of Alexandria, representing one of the largest deals of its kind.

Additionally, Egypt signed an $8.1bn (EUR 7.4bn) financial and investment package with the European Union. This package includes grants and loans spread over the next three years, reinforcing Egypt’s economic recovery efforts.

The agreements were formalised during a visit by European Commission President Ursula von der Leyen and leaders from Belgium, Italy, Austria, Cyprus, and Greece in March, highlighting international confidence in Egypt’s economic prospects.