Egypt borrows $500m from China

Banque Misr, the second largest state-owned bank, has signed a $500 million loan agreement with the China Development Bank (CDB) to strengthen its foreign liquidity position, according to an official statement from the Egyptian Ministry of Investment and International Cooperation.

The agreement was signed in the presence of the Egyptian Minister of Investment and International Cooperation, Sahar Nasr, on the sidelines of the China “One Belt, One Road” two-day summit, which was launched yesterday under the Silk Road Initiative launched by China’s President Xi Jinping.

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According to the statement, the loan will be used to finance a number of projects involving Chinese companies in Egypt, as well as funding domestic imports from Beijing. It has a term of eight years.

In April, the bank signed a $100 million loan agreement with the CDB for a five-year term to finance small and medium enterprises (SMEs). Another two memorandums of understandings (MoUs) were also signed with the China Export and Credit Insurance Corporation, known as Sinosure, to provide a maximum of $500 million in guarantees to fund the bank’s projects that include Chinese financial involvement.

Egypt has been suffering a shortage in foreign currency and its external debt reached $67.3 billion at the end of 2016, compared to $47.7 billion during the same period of 2015.