A look at the IMF’s playbook for the third loan review: The International Monetary Fund is currently conducting the third review of our expanded USD 8 bn loan program, two high-level government sources told Enterprise, confirming reports that an IMF delegation is currently in town for the review. The discussions are centered around the use of Ras El Hekma’s sale proceeds and the implementation of the state ownership policy, the sources said.

Remember: The review — which is expected to be completed around 15 June — will unlock the third USD 820 mn tranche of our loan program. We unlocked the second tranche in April, nearly a month after the IMF’s Executive Board signed off on a USD 5 bn extension for the facility and the immediate dispersal of our first tranche.

THE BREAKDOWN-

#1- Ras El Hekma funds: The IMF delegation is looking into how the government’s use of the Ras El Hekma sale proceeds aligns with the state’s new spending goals and fiscal targets — including reducing public debt, capping government investments, and narrowing the budget deficit.

We’re on the right track: Some USD 11 bn of Egypt’s external debt is expected to be written off using funds from the Ras El Hekma sale.

#2- State ownership policy: The Fund will also review the steps taken by the government to advance its ownership policy, taking stock of offers received and progress made in the privatization of state assets. It’s also reviewing the growth of foreign direct investment and measures taken by the government to improve the investment environment, our sources said.

The latest on privatization: Planning Minister Hala El Said said last week that state-owned fuel retailer Wataniya has received seven international and local acquisition offers, while the US government’s US International Development Finance Corporation was reported to be considering financing UK-based private equity giant Actis’ planned acquisition of the Gabal El Zeit wind farm.

Things are looking up: The Fund sees improved economic indicators, strengthened cash flows, and positive steps by the government towards implementing the privatization program, the sources said

Even more funds incoming? Negotiations are underway for Egypt to access USD 1.2 bn in long-term, low-cost climate financing from the IMF's Resilience and Sustainability Facility.

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