Egypt is in negotiations with several international financial institutions to link development loans to the EGP under a new pricing mechanism, a government official tells EnterpriseAM. The discussions with the World Bank, the International Finance Corporation, and the African Development Bank aim to agree on a new mechanism that will hedge against exchange rate volatility.

Why this matters: Exchange rate volatility alone added approximately USD 2 bn to Egypt’s external debt in 2025, effectively offsetting the state’s progress in the year to lower its debt service burden, our source tells us. By linking the amount of debt owed to the EGP, the government hopes to hedge against FX risks to ensure that long-term project repayments are not inflated by future devaluations.

The government is also in talks with international institutions to open concessional credit lines and accelerate disbursements to secure between USD 1-2 bn in urgent budget support, our source added.

These talks focused on navigating the “exceptional conditions” currently facing the region. According to the current debt strategy, concessional financing is expected to account for 60% of Egypt’s external financing needs through 2030, with commercial markets covering the remaining 40%.

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