Egypt received its second EU tranche, with one EUR 1.5 bn payment left on the EUR 5 bn package

The European Commission disbursed EUR 1.5 bn to Egypt on Thursday, the second of three installments under its ongoing EUR 4 bn Macro-Financial Assistance (MFA) program, the Commission said in a statement. The concessional loan is meant to help Egypt cover part of its financing needs, preserve macroeconomic stability, and keep its economic reform program moving in step with the IMF — easing pressure on external finances, including strains tied to regional tensions.

The Commission’s statement credits Egypt with improving public financial management and the functioning of the foreign exchange market, in addition to strengthening state-owned enterprise governance, advancing digitalization of public services, and making progress on water management and energy under the green transition.

IN CONTEXT– Egypt had hoped the tranche would land by end-June; it arrived nearly a month later. For January’s first EUR 1 bn tranche of the same program, the Commission cited “competitive bidding for industrial land allocation and streamlined online licensing” as evidence of business-environment progress. Thursday’s payment brings what we’ve received to EUR 3.5 bn of the EUR 5 bn in MFA pledged under the EUR 7.4 bn EU-Egypt Strategic and Comprehensive Partnership in 2024 — a EUR 1 bn short-term facility disbursed in December 2024, plus the first two installments of this EUR 4 bn medium-term operation. One EUR 1.5 bn tranche remains. The partnership includes EUR 1.8 bn in investment agreements and EUR 600 mn in grants.

BACKGROUND- Other financing under the same partnership has landed in recent weeks, including a EUR 690 mn grid-upgrade agreement. As with the previous two disbursements, this installment was conditioned on Egypt meeting the economic-policy conditions agreed with the EU, keeping the IMF program on track, and taking what the Commission called “some concrete and credible steps” toward democratic mechanisms, the rule of law, and human rights.

Also on the EU front: Industry Minister Khaled Hashem met with EU ambassador to Egypt Angelina Eichhorst last week to discuss deepening cooperation on SME development, the automotive sector, workforce training, and the EU’s carbon border adjustment mechanism (CBAM), according to a ministry statement. The ministry will announce new industrial land allocation rules, including an easier track for small investors, and asked the EU to help get a new vocational training program accredited by European institutions. Eichhorst flagged the EU-Egypt Sustainable Investment Facilitation Agreement (SIFA) as a channel for more European investment and noted recent growth in Egyptian agricultural and fertilizer exports to the bloc.

IN OTHER DEBT UPDATES

The European Bank for Reconstruction and Development (EBRD) approved a senior loan of up to EGP 465 mn (c. EUR 8.3 mn) to GB Logistics, the logistics arm of GB Corp (formerly GB Auto), to build up to three warehouses and buy up to five electric trucks and their charging stations — a move that would make GBL among the first Egyptian logistics operators to run EVs in its own freight fleet, according to a project disclosure. The loan, secured by a corporate guarantee from GB Corp, covers most of the roughly EGP 487.5 mn project cost.

The trucks come with a separate EUR 400k EBRD investment grant meant to offset the higher upfront cost of going electric. The investment grant includes EUR 213k from the bank’s Shareholder Special Fund and EUR 187k from its FINTECC clean-tech facility, which co-finances clean technology adoption in emerging markets. The EBRD is also attaching two technical-assistance assignments to the deal: one to help GB Corp win EDGE green-building certification on selected facilities, and another to help GBL implement a gender and inclusion plan aimed at improving women’s recruitment, retention, and progression.

The new warehouses would lift GBL’s storage capacity by about 10%, while the EBRD casts the EV purchase as a proof-of-concept meant to spur wider adoption of low-carbon trucking in Egypt. Worth noting on the green framing: the bank classifies only 10% of its financing here as green finance — the bulk is going to conventional warehouse construction.

IN CONTEXT- The loan adds to a steady run of EBRD green financing across Egypt’s private sector this year: the bank extended an EGP 1.3 bn facility to Ibnsina Pharma in January for an EDGE-certified logistics warehouse, a USD 65 mn bridge loan to Hassan Allam Utilities in April for the Nefer Benban solar-and-storage plant, and an EGP 600 mn loan to Valu in June to finance household purchases of solar power and EV-related products. EBRD’s Hashem Abdel Hakim, its former deputy head of Egypt and head of financial institutions for the country and recently-appointed regional director for the eastern Mediterranean region, told us in April that the bank’s 2026 Egypt ticket runs USD 1.4-1.5 bn, with at least 40% — roughly USD 600 mn — earmarked for green projects.