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Egypt borrows $1.2bn from China to fund electric train project

January 16, 2019 at 11:53 pm

Egyptian pounds [emi moriya/Flickr]

Egypt has signed a $1.2 billion loan agreement with the Export-Import Bank of China (EximBank) to finance an electric railway project, the country’s transport minister, Hesham Arafat, announced yesterday.

Speaking at the deal’s signing ceremony, Arafat’s said that the loan would fund the construction of “Egypt’s first electric train.” The event was attended by the Egyptian Prime Minister Moustafa Madbouly, the Minister of Investment Sahar Nasr, Egypt’s chairman of the National Authority for Tunnels Ahmed Fouda, and Exim’s vice president Sung Ping.

Arafat explained that the train would link the country’s new industrial cities located in the outskirts of the capital Cairo together, including 10th of Ramadan City, the New Administrative Capital, and El Salam city.

Read: Egypt’s Sisi prohibits travel of senior officials, Al-Azhar Grand Imam

The light train, he pointed out, would include 11 stations and would serve 350,000 people.

The minister noted that the loan encompassed $739 million at an interest rate of 1.8 per cent and $461 million at a rate of two per cent. “The loan will be paid over 15 years with a five-year grace period,” Arafat said.

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

In June 2018, Egypt’s foreign debt rose by 17.2 percent year-on-year, hitting $92.6 billion compared to $79 billion during the same period in 2017.

In November 2015, Egypt won a three-year $12 billion International Monetary Fund (IMF) loan, which aimed at reviving the country’s struggling economy, bringing down public debt and controlling inflation while seeking to protect the poor.