The Asian Infrastructure Investment Bank (AIIB) is putting together USD 300 mn in budget support for Egypt, Planning and International Cooperation Minister Rania Al Mashat told Bloomberg. The agreement is expected to be finalized by June, Al Mashat said, adding that negotiations have been completed and that local authorities are “just going through the paperwork.”

The government is also pursuing several debt swap agreements aimed at lowering the country’s external debt and improving its credit position, Al Mashat said, citing ongoing talks with Germany on a debt-for-equity swap that could see Berlin invest in energy-transition projects.

Slashing Chinese debt is also part of the plan, after local and Chinese authorities last week discussed a debt-for-development swap that seeks to convert a portion of Egypt's debt into interest-free loans to finance development projects. An Investment Ministry statement indicated that the talks were part of “existing cooperation” on the matter between the two countries, without laying out any specifics.

DATA POINT- 6.1% of our external debt is owed to the Chinese, totalling USD 9.4 bn, as of June, according to the most recent figures from the central bank (pdf).

The news follows reports that Kuwait is considering converting USD 4 bn of deposits it holds in the central bank into direct investments in several local sectors out last week. And of course, before this an agreement was inked with Abu Dhabi wealth fund ADQ last year that converted USD 11 bn of UAE deposits at the CBE into investments in the USD 35 bn Ras El Hekma project.

The end goal? The government aims to bring down the debt-to-GDP ratio to 80% by the end of June 2026 and to lower the external debt by USD 1-2 bn annually.

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