World Bank funds to begin rolling in: The World Bank has announced that it will be providing Egypt with USD 700 mn in Development Policy Financing (DPF) to help “support the country to shift toward more private sector participation, better macroeconomic and fiscal resilience, and a greener growth trajectory,” the World Bank and the International Cooperation Ministry said in separate statements yesterday.

The funding comes as part of a three-year USD 6 bn financing package from the bank that was announced in March shortly following the float of the EGP, which the bank said is designed to help boost private sector growth and job creation and “enhance human capital outcomes, foster climate resilience, and strengthen economic management.” Of the USD 700 mn included in the current DPF, USD 200 mn will be contingent on complementary financing from other development partners, the bank said.

The DPF round is the first in a “programmatic series of three operations,” the bank continued, with this particular round targeting the advancement of reforms that include:

  • Creating a legal basis for the state ownership policy, strengthening the governance framework of state-owned enterprises;
  • Empowering the Egyptian Competition Authority in combating non-competitive or monopolistic M&As;
  • Ensuring the state’s assessment of payroll taxes in an effort to improve domestic revenue mobilization;
  • Reducing losses from the electricity distribution system;
  • Increasing the capacity for climate adaptation, with a particular focus on the financial sustainability of water and sanitation;
  • Building up Egypt’s renewable energy sector;
  • Establishing a regulatory framework for the voluntary carbon credit market.

What they said: “The government of Egypt is undertaking ambitious economic and structural reforms aimed at creating a more competitive, green and private sector-led economy. Through this budget support instrument, the DPF with the World Bank helps advance policy reforms on three of its top national priorities: building macro-fiscal resilience, enhancing economic competitiveness and improving the business environment, and supporting the green transition,” International Cooperation Minister Rania Al Mashat said.

Remember: Half of the USD 6 bn in funding is set to go to the government to support its economic and structural reforms, social protection programs, and its green economy transition. The other half will be distributed to the private sector through the group’s International Finance Corporation in the form of equity and loans made up partly by investor funds.

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.

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