Life support, but not a cure: an inside look into the aid packages that are (barely) keeping Egypt together
Minister of Foreign Trade, Industry and Investment Mounir Fakhry Abdel Nour announced earlier this week that the US Congress has recently approved a $120m initiative to support investment in Egypt. The minister’s statement marked the latest announcement made by the government regarding the efforts of international organisations and countries to support the Egyptian economy.
Since the ouster of former president Mohamed Morsi, financial support has been provided by a number of countries and international institutions. Assistant packages varied from cash, grants and loans to deposits and fuel products. The Daily News Egypt lists the financial packages received from such entities.
The United Arab Emirates (UAE) announced in July the provision of a $3bn aid package to Egypt comprised of a $1bn grant and a $2bn interest-free deposit at the Central Bank of Egypt (CBE). The UAE also provided seven shipments of fuel worth $225m. In September, UAE crown prince and deputy supreme commander of the armed forces Mohammed bin Zayed Al-Nahyan pledged to send $2bn in additional aid to Egypt in the form of deposits and grants. In October, the two parties signed an agreement valued at $4.9bn.
Saudi Arabian aid
The Kingdom of Saudi Arabia (KSA) pledged $5bn to Egypt in the form of grants, deposits and petroleum products. The KSA aid was divided into $1bn cash, a five-year $2bn interest free deposit at the CBE and $2bn in the form of petroleum products.
Kuwait provided Egypt with a $1bn non-refundable grant and a five-year $2bn deposit to the CBE. The Gulf country also supplied Egypt with $1bn worth of petroleum products, bringing the total value of aid from Kuwait to $4bn.
The World Bank and the European Union
On 1 July, the World Bank announced it had approved a $585.4m loan to finance Egypt’s Helwan South Plant Project, a new gas-fired power plant that will contribute up to 10% to new electricity generation nationwide. Egypt and the World Bank have signed an agreement in November.
In September, chairman of the Federation of Egyptian Chambers of Commerce Ahmed El-Wakil announced the launch of eight new regional projects valued at EGP 260m; the projects will be funded by the European Union (EU). The projects targeted the sectors of food industry, tourism, textiles, solar energy and environment, as well as the construction and modernisation of schools.
On 28 November, then Interim Deputy Prime Minister Ziad Bahaa El-Din said that a €90m deal was signed with EU High Representative for Foreign Affairs and Security Policy Catherine Ashton.
“This assistance will enhance the access of children, especially girls, to education and will fight child labour in the poorest areas of Egypt,” Ashton said.
In December, then Minister of Energy and Electricity Ahmed Imam announced that the cost of constructing the Suez-Samalot 280 kilometre line will total around EGP700m, to be financed by the World Bank.
On 12 March, the EU and the World Bank provided Egypt with €70m and €200m, respectively. The money will be used for the Egypt Emergency Labour Intensive Investment Project (ELIIP), which will be implemented by the Egyptian Social Fund for Development and will create 8.5m temporary jobs and 2,300 permanent ones.
According to the cabinet’s official page, the European Union is expected to provide Egypt with a €15m grant to be used for the improvement of four informal settlements in Greater Cairo and Giza, where 1.2 million Egyptians reside. The four settlements are Ezbet Kheir Allah and Al-Zawya Al-Hamra in Cairo and Ard El-Lewa and Miet Uqba in Giza.
Earlier this month, the board of executive directors at the World Bank agreed to loan Egypt $300m to finance micro and small enterprises (MSEs). The loan will finance the promotion of the Innovation for Inclusive Financial Access Project, which aims to reach more than 130,000 enterprises.
European countries and international bodies
In November, the Egyptian ambassador to France Mohamed Mustafa Kamal announced that France was preparing to launch two development projects in Egypt worth a total of €110m. Kamal said that the first project, valued at €30m, is expected “to support small and medium enterprises operating in the agricultural sector”, while the second project, worth €80m, will aim to create “job opportunities for the residents of slum areas” using “microfinance projects” through Egypt’s Social Fund for Development. The Ministry of Planning and International Cooperation signed a €80m agreement on 25 March with the French Agency for Development to offer long-term credit to small and micro Egyptian businesses.
The Ministry of International Cooperation signed a new agreement in November, Programme II (IWSP II), with a number of European bodies which will supply Egypt with €209m to improve water and wastewater services for nearly 15.3 million Egyptians. The European bodies include the European Union (EU), German Development Bank (KFW), French Development Agency (AFD), European Investment Bank (AIB) and Swiss State Secretariat for Economic Affairs (SECO).
The Ministry of Supply and Internal Trade stated in November that Italy has provided Egypt with a $66m grant to build silos in the Giza governorate and assist in the development of bread bakeries in Sheikh Zayed.
In December, the Africa Development Bank (ADB) stated that it has signed a $2m grant with the Egyptian government to support the industrial waste management initiative and projects by small and medium enterprises (SMEs) in Egypt. The grant, which is provided by the transition fund for the Middle East and North Africa (MENA) under the umbrella of Deauville’s partnership with Egypt, will finance “Green Growth” and the development of SMEs.
In February, the Islamic Development Bank (IDB) announced that it has allocated $220m to finance a thermal power plant in Assiut. During the same month the European Investment Bank (EIB) signed a €205m agreement with the Egyptian government to finance the upgrade of the Shabab and West Damietta electricity power plants. In March, a $190m loan was provided by the European Bank for Reconstruction and Development (EBRD) to the Egyptian Ministry of Energy and Electricity to finance the same project.
Early March, the Chinese government provided Egypt with a $24.4m non-refundable grant. The Ministry of International Cooperation said the grant will be used to finance social and economic developmental projects.
The Arab Fund for Economic and Social Development (AFESD) signed $412m agreement with the Egyptian government. Around $200m will be used to finance the Assuit power station while $162m will be used to finance the Egyptian-Saudi electricity linkage project. Approximately $50m were provided as a loan to finance small and micro enterprises.
- What's its secret? Kuwait sustains non-oil growth for two years
- The reliable consumer: China on track to become biggest export market for GCC by 2020
- After the GCC 'happy' summit, is a customs union closer to reality?
- A bleak record: Turkey comes second in OECD income inequality list
- ًA safe bet? Why the ME's businessmen are chasing after St.Kitts and Nevis' citizenship