ALBAWABA – The governments of the United Arab Emirates (UAE) and Egypt are negotiating a new Egypt-UAE loan deal to finance Egypt’s wheat purchases, Egyptian Supply Minister Ali el-Moselhy told Bloomberg.
The funds will be provided by the Abu Dhabi Fund for Development in $100 million instalments, the minister said.
However, he did not disclose when the deal is likely to be finalized.
Abu Dhabi-based agribusiness firm Al Dahra will be one of the first suppliers of the grain under the Egypt-UAE loan deal, but Moselhy said that the funding could be used for other purchases.
The Egypt-UAE loan deal will be facilitated through the fund’s Abu Dhabi Exports Office (ADEX), unnamed sources told Reuters.
Egypt’s General Authority for Supply Commodities (GASC) started deferring payments for its wheat purchases as a result of an acute currency crunch.
The finance ministry said funding for subsidies on food, mostly bread, will rise 41.9 percent to $4.1 billion (127.7 billion Egyptian pounds) in the year from July 2023 to June 2024.
The UAE and other Gulf states, such as Qatar, have looked to bolster Egypt’s economy in recent months.
This month, the Egyptian government announced that Abu Dhabi wealth fund ADQ would invest $800 million in companies in Egypt.
If this Egypt-UAE loan deal is finalized, the money would be a boost for Egypt, one of the world’s biggest wheat importers.
Egypt is facing a dire shortage of foreign exchange and a cost-of-living crisis, partly as a result of soaring food prices after Russia’s invasion of Ukraine last year.
