EU approves the disbursement of EUR 1 bn to Egypt

Egypt is receiving EUR 1 bn from the EU: The European Union approved the disbursement of an EUR 1 bn macro-financial assistance package on Friday to “accompany (Egypt’s) reform agenda,” European Commission President Ursula von der Leyen wrote on X. The package marks the first phase of a EUR 5 bn set of concessional loans running through 2027, which comes as part of a wider EUR 7.4 bn package from the EU announced in March.

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The funds will go towards alleviating external financing constraints, easing the government’s balance of payments and budget needs, and boosting FX reserves against the backdrop of regional geopolitical tensions. The package got the thumbs up from the cabinet in August and was initially agreed upon back in June.

When can we expect the funds to land in state coffers? “This disbursement, which corresponds to the first and only instalment, will take place in the coming days,” the EU Commission said in a statement on Friday.

The details of the next tranche are already being discussed: The package’s second tranche — which is set to come in at around EUR 4 bn — is “currently under discussion with co-legislators,” according to the statement. The remaining EUR 4 bn is set to be disbursed between 2025 and 2027, according to a previous statement from the International Cooperation Ministry.

Geopolitics played a role in the EU’s decision to grant us the funds: The commission pointed to the economic challenges Egypt is facing due to the ongoing situation between Russia and Ukraine and Israel’s war on Gaza. Egypt represents a “key pillar of stability and a strategic partner of the EU,” the statement reads.

The EU is pleased with Egypt’s progress on the business front: “Progress has been made in the business and investment environment, through increased transparency on investment and import conditions, and strengthening the role of the competition authority,” the statement reads.