Egyptian President Abdel Fattah Al-Sisi yesterday ratified a loan agreement between his government and Germany, under which Cairo would borrow €102.5 million ($114.6 million) from Berlin.
“Under the presidential decree No 68 for the year 2019, Sisi approved a German loan agreement which was signed between the two governments in Cairo on 23 December 2018,” state official MENA news agency said.
The loan, the agency explained, would fund several mega projects, including “the rehabilitation of hydroelectric power plants, renewable energy plants, and national energy efficiency programme, JICA irrigation project, as well as financing micro, small and medium projects.”
According to the agreement terms, €2.5 million ($2.8 million) of the loan are to be repaid after 40 years, with a ten-year grace period and an annual interest rate of 0.75 per cent. The remaining €100 million ($111.8 million) are due after 30 years, with a ten-year grace period and at a two per cent interest rate.
Egypt has been negotiating billions of dollars in aid from various lenders to help revive its battered economy since the 2011 revolution, and to ease a dollar shortage that has crippled imports and hampered recovery.
In November 2016, Egypt won a $12 billion IMF loan for a three-year bailout programme that aimed at reviving the struggling economy, bringing down public debt and controlling inflation while seeking to protect the poor.
Since Al-Sisi took power, Egypt’s external and internal debts jumped by 100 per cent in only four years, according to official data.