The European Bank for Reconstruction and Development (EBRD) has signed an EGP 1.3 bn financing agreement with Ibnsina Pharma, the company said in a disclosure yesterday (pdf). The facility will back a major green logistics expansion by Ibnsina — Egypt’s largest pharmaceutical distributor — and reinforce the growing role of development finance in sustaining capex as elevated local borrowing costs persist.

Under the agreement, the EBRD will fund:

  • Construction of a new warehouse targeting at least an EDGE standard certification.
  • Green capex upgrades, supported by EBRD technical advisory services, including energy audits and resource-efficiency enhancements.
  • Long-term working capital, supporting scale-up across Ibnsina’s distribution network.

Once completed, the warehouse is expected to deliver an annual reduction of 207 tonnes of CO2 emissions, alongside material water savings — a key condition for unlocking this tranche of climate-linked financing.

From equity to debt

The transaction comes one year after the EBRD fully exited its equity stake in Ibnsina. Having supported the EXG-listed company’s growth as a shareholder since 2015, the bank is now backing Ibnsina’s next phase through project-linked debt rather than ownership.

The loan offers Ibnsina favorable repayment terms, and “the long-standing relationship with the EBRD made the due-diligence process swift,” Mohamed Shawky, Ibnsina’s head of investor relations told EnterpriseAM. “We view this facility as an international quality seal. Passing the EBRD’s rigorous due diligence validates our governance, transparency, and operational standards to our stakeholders, Mohsen Mahgoub,” Ibnsina Pharma’s managing director noted in the statement.

Why it matters

The EBRD’s intervention provides long-tenor, EGP-denominated liquidity that allows Ibnsina to continue scaling without compromising balance-sheet stability or delaying capex. The development finance is stepping in to prevent an infrastructure slowdown in a sector where logistics capacity is tightly linked to medicine availability and pricing efficiency.

For Ibnsina, the new warehouse will be part of a network optimization and expansion plan that includes up to 12 new warehouses, aimed at boosting capacity in response to rising volumes and a more diversified revenue base.

The broader picture

The EBRD is also set to extend fresh financing to the manufacturing side of the pharma sector: Minapharm secured board approval earlier this month for a EUR 13.25 mn EBRD facility, denominated and repayable in EGP, the company disclosed last week (pdf). Minapharm will use the loan primarily to refinance existing short- and medium-term debt, while also supporting capex tied to a new production facility and the development of a vocational training academy, underscoring how development finance is being deployed across the pharma value chain.

Egypt remains one of the largest pharmaceutical markets in MENA, driven by population growth and structurally rising healthcare demand. Distribution infrastructure is a critical bottleneck and one that cannot afford underinvestment. By channeling green, local-currency financing into logistics-heavy operators like Ibnsina, EBRD is effectively acting as a capex backstop to ensure that expansion plans remain intact despite tight domestic credit conditions.

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