Egypt receives final $500m tranche of African bank loan

Egypt yesterday signed an agreement to receive the third $500 million tranche of a $1.5 billion loan package from the African Development Bank (AfDB).

The loan agreement, which was approved by AfDB’s board of directors on 18 January, was signed in an official ceremony between the Egyptian Minister of Investment and International Cooperation, Sahar Nasr, and the AfDB’s Egypt Country Manager, Malinne Blomberg.

During the ceremony, Blomberg said that the funding package was designed to support Egypt’s sustainable growth as well as enhancing governance and offering job opportunities for the young.

She pointed out that the AfDB is currently funding 30 multi-sectoral projects in Egypt worth $2.4 billion in total.

On her part, Nasr noted that the deal affirms that “the Egyptian economy is moving firmly along the path to sustainable and comprehensive development,” adding the last tranche is expected to fund the country’s social-security system needs.

Read: The destruction of the Egyptian economy

In December 2015, Egypt signed an agreement with AfDB to receive a $1.5 million loan to be disbursed on three equal tranches.  The loan is expected to be repaid within 25 years with a five-year grace period and an interest of 1.2 per cent. The first tranche was received in late December 2015, while the second was received in late March 2017.

Egypt has been negotiating billions of dollars in aid from various lenders to help revive an economy battered by political upheaval since the 2011 revolt and to ease a dollar shortage that has crippled import activity and hampered recovery.

In November 2016, Egypt won a $12 billion IMF loan for a three-year bailout programme that aimed at reviving a struggling economy, bringing down public debt and controlling inflation while seeking to protect the poor.

According to recent statistics issued by Fitch Ratings, Egypt’s foreign debt rose to $100 billion in December, representing 44 per cent of the country’s total Gross Domestic Product (GDP), compared to 23 per cent in late 2016.