Fresh climate finance on the horizon for Egypt: Egypt will be eligible to lock in an additional USD 1-1.2 bn in climate finance from the International Monetary Fund (IMF) if separate negotiations translate into an agreement on the back of a freshly inked USD 8 bn program, Prime Minister Moustafa Madbouly said at a press conference yesterday with Central Bank of Egypt Governor Hassan Abdalla and IMF mission chief for Egypt Ivanna Hollar (watch, runtime: 18:13). This agreement is subject to approval by the IMF’s executive board, which will meet to consider the pact before the end of the month, Hollar said at the presser.

The agreement came together yesterday after Egypt’s central bank announced the float of the EGP and a jumbo rate hike. All of this was built on a pledge two weeks ago of up to USD 35 bn worth of investment from Abu Dhabi’s ADQ, including some USD 24 bn in payments for the development rights to Ras El Hekma. The first payment from ADQ arrived in Egypt last week.

As the IMF sees it: The expanded package ”seeks to preserve debt sustainability, restore price stability, and reinstate a well-functioning exchange rate system, while continuing to push forward deep structural reforms to promote private sector-led growth and job creation,” Hollar said.

It should also open the door more for the private sector: The reforms are also aimed at “fostering an environment that enables private sector activity,” according to Hollar — a move that will create jobs and attract fresh investment.

And there might be more to come: The agreement will be followed by more funding — in soft loans — from other international partners like the World Bank and EU, Madbouly added. (We don’t expect bns from the EU, which has perhaps EUR 500 mn more headroom for Egypt, we’re told.)

It will all come together to a “large comprehensive package,” Madbouly said at the press conference, adding that the funding “will once again allow Egypt to be fiscally stable and carry on with its structural reforms.” (Tap or click here to read the full cabinet statement.)

What the prime minister is saying: The agreement comes within the framework of a wider set of structural reforms that aim to increase FX reserves, reduce foreign and local debt, ensure the consistent flow of FDI over the coming period, see the economy achieve high growth rates, and reduce inflation, the prime minister explained.

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