European Union Announces $8 Billion Fund for Egypt

A high-ranking delegation from the European Union (EU), including President of the European Commission Ursula von der Leyen, announced a substantial funding package of USD 8.06 billion (EGP 385.38 billion) for Egypt on 17 March, the organization announced in a press release circulated across media outlets.

The package was unveiled during a visit to Cairo from the Italian, Greek, Austrian and Belgian prime ministers, the Cypriot president, and Leyen to meet Egyptian President Abdel Fattah Al-Sisi.

“The EU and Egypt are taking their cooperation to the level of a Strategic and Comprehensive Partnership,” the press release explained.

The upgraded cooperation between the two covers six main priorities – political relations, economic stability, investments and trade, people and skills, security, and migration and mobility.

The union is particularly invested in renewable energy, digital transformation, and Egypt’s role in promoting regional stability in terms of security and border control.

The fund will be allocated a mix of grants, loans, and macro-financial assistance, a high-ranking EU Commission official disclosed to Reuters.

Around USD 5.44 billion (EGP 260.46 billion) will be designated for macro-financial assistance, USD 1.96 billion (EGP 93.76 billion) for investments, and USD 653.7 million (EGP 31.25 billion) in grants – this includes USD 1.08 billion (EGP 52.09 billion) in emergency funding slated for disbursement this year.

The remaining of the package is subject to approval by the European Parliament.

Egypt’s latest external funding comes weeks after the International Monetary Fund (IMF) recently expanded its loan program for Egypt from USD 3 billion (EGP 143.44 billion) to USD 8 billion (EGP 382.51 billion) in response to the regional consequences of Israel’s war on Gaza.

The country is set to receive another financial injection in the form of a USD 3 billion (EGP 143.44 billion) loan from the World Bank, according to Egypt’s Minister of Finance Mohamed Maait.

Recent external funding arrived during a shortage in Egypt’s foreign currency reserves – a crisis the country has grappled with since the Russian invasion of Ukraine in March 2022 and exacerbated by the war on Gaza in October 2023.

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