A USD 6 bn package from the World Bank: The World Bank will provide Egypt with a USD 6 bn financing package over the next three years, the International Cooperation Ministry and the World Bank said in separate statements. The package is subject to the group's board approval, which is anticipated before the end of June.

That’s double what we were expecting: Finance Minister Mohamed Maait had previously said that the World Bank will be extending some USD 3 bn in financing to Egypt.

The breakdown of the funding:

  • USD 3 bn for the gov’t: Half of the funding will go to the government to support its economic and structural reforms, social protection programs, and its green economy transition.
  • USD 3 bn for the private sector: The other half will be distributed through the group’s private sector arm, the International Finance Corporation (IFC), and will go to the private sector. The funding will be delivered in the form of equity and loans made up partly by investor funds.

Target reached: Finance Minister Mohamed Maait had previously said that Egypt could receive a total of USD 20 bn in foreign support. Our expanded USD 8 bn IMF program, EU EUR 7.4 bn (c. USD 8.05 bn) package of loans, grants and investments in addition to the World Bank package puts us at USD 22.1 bn.

All in all, we’ve locked in over USD 57 bn in inflows, taking into account the ADQ’s USD 35bn agreement for the development of Ras El Hekma. “That’s enough to address the country’s USD shortages for a few years. But addressing the chronic trade deficit, the flexibility of the exchange rate, and the dominant role of the army in the economy would require more than throwing money at these problems,” Bloomberg’s chief emerging markets economist Ziad Daoud said.

More to come: Maait said we’re in line for USD 1-1.2 bn from the IMF’s Resilience and Sustainability Facility, in addition to funding from Japan and the UK.

Funds by summer: The World Bank is expected to disburse the first USD 1 bn by the end of June after the board approved the package, Egypt country director Stephane Guimbert told Reuters. “Some significant part of that will go to budget support. and then we have a range of programs on climate, on SMEs, etc,” he added.

The World Bank’s aims: The group is “committed to its long-term strategic partnership with Egypt” and wants the funds to support the private sector’s participation in the state’s privatization program, strengthen the governance of state-owned enterprises, and improve the efficiency and effectiveness of public resource management.

Part of a wider framework: The financing falls under the World Bank’s 2023-2027 Country Partnership Framework with Egypt, under which the bank’s International Bank for Reconstruction and Development (IBRD) will be lending us USD 1 bn a year through to 2027 to support private-sector job growth, health and education services, and climate measures.

The World Bank’s current operational portfolio in Egypt is valued at over USD 8 bn — of which USD 6 bn was allocated from the IBRD and USD 2 bn from the IFC and the Multilateral Investment Guarantee Agency.

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