Egypt inks debt swap agreement with China: The International Cooperation Ministry inked a memorandum of understanding on a debt swap with the China International Development Cooperation Agency (CIDCA) at the Belt and Road Forum on Thursday, the ministry said in astatement. The statement didn’t disclose any specifics, including the value of the agreement.

About 5% of our total external debt is owed to the Chinese: Egypt owed USD 8.2 bn to China as of the end of March, according to central bank figures (pdf). This includes USD 5.3 bn in long-term debt and a USD 2.6 bn currency swap agreement with the Chinese central bank. The country’s total debt was USD 165.4 bn as of 1Q 2023.

We already have two debt swap programs in progress worth about USD 730 mn: a EUR 240 mn program with Germany — USD 116 mn of which went towards the energy pillar of the government’s Nexus for Water, Food and Energy (NWFE) program — and an agreement with Italy. The two programs have been used to fund 120 local development projects, said a separate ministrystatement.

CHINA LIKES EGYPT-

China wants to expand in Egypt, Xi tells Madbouly: China is looking to increase its economic footprint in Egypt, namely in the infrastructure, energy,aviation, tourism, renewables, and healthcare sectors, Chinese President Xi Jinping said duringhis meeting with Prime Minister Moustafa Madbouly on the sidelines of the forum. The two sides also discussed expanding the TEDA zone and attracting more Chinese investments to Egypt in green hydrogen and EV production.

More CNY in Egypt:The debt swap “will encourage Chinese investments in Egypt in local currency,” cabinet quoted Madbouly as saying during a meeting with CIDCA head Luo Zhaohui. Egyptian and Chinese authorities have recently entered talks to allow Chinese companies to use CNY to invest in local projects, rather than the USD.

LRT funding confirmed:Luo announced that CIDCA will provide soft financing for the third and fourth phases of the electric light rail train, cabinet said, without detailing the value or tenor of any loans. Local media reported earlier this month that China Eximbank will lend Egypt USD 400 m n for the third phase of the project.

ICYMI- Chinese and Egyptian companies signed a raft of agreements last week on the sidelines of the Belt and Road Forum that could see up to USD 15.5 bn invested in energy and manufacturing projects in Egypt.

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