Egypt to receive third $500m portion of AfDB loan

Egypt will receive a payment of $500 million as the third and final tranche of the African Development Bank (AfDB)’s there-year $1.5 billion loan, AfDB’s Resident Representative for Egypt, Leila Mokaddem, announced yesterday.

Speaking at the Euromoney Conference which was held in Cairo, Mokaddem said that the bank is planning to send a high-level mission to Egypt early next month to discuss the disbursement of the loan.

The AfDB is currently financing various multi-sectoral projects in Egypt, including electricity, energy, agriculture, irrigation, transport and airports sectors.

The AfDB is comprised of three entities: the African Development Bank (ADB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). Egypt is a founding member of the AfDB and is the second largest shareholder of its capital.

Late 2015, Egypt signed a three-year $1.5 billion loan agreement with the AfDB, with the aim to fund mega projects in various sectors in Egypt and to support the government’s comprehensive programme or economic development.

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The loan has a 25-year repayment period, a five-year grace period and interest of 1.2 per cent.

Egypt received the first $500-million tranche of the loan in December 2015, while it received the second tranche by the end of last March.

The bank’s portfolio in Egypt stood at $2.3 billion, Mokaddem noted, adding that it is set to reach $3 billion by the end of this year.

On Sunday, the Egyptian finance minister, Amr El-Garhy, said that his country is planning to issue new international bonds worth $10 billion.

In March, Egypt’s external debt increased by 38 per cent, reaching $73.8 billion. This represented 41.2 per cent of the country’s total Gross Domestic Product (GDP), compared to 18.1 per cent during the same period in 2016.

Egypt won International Monetary Fund (IMF) loan last November for a three-year, $12 billion bailout programme aimed at reviving a struggling economy, bringing down public debt and controlling inflation while seeking to protect the poor.