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World Bank Group Announces $6 Billion Financial Support for Egypt

March 19, 2024
Image Credit: Wikimedia Commons

The World Bank Group (WBG) is providing Egypt with a new USD 6 billion (EGP 283.05 billion) financial support package, the multilateral lender announced on 18 March.

“[WBG] supports the measures [Egypt] is taking for its economic recovery and restoring a sustainable path for inclusive growth,” the press release explains, also highlighting WBG’s commitment to its long-term strategic partnership with Egypt.

Designed to advance Egypt’s economic development and foster increased private sector involvement, the WBG outlined a program to enhance the country’s economic landscape through several channels.

The funding, which will be allocated over the next three years, comprises USD 3 billion (EGP 141.52 billion) for governmental programs and another USD 3 billion earmarked for the private sector, subject to approval.

“In support of the Government’s development priorities, programs will focus on increasing opportunities for private sector participation in the economy, including through the Government’s Asset Monetization Program, strengthening the governance of state-owned enterprises, and improving the efficiency and effectiveness of public resource management,” the organization outlines.

Furthermore, the Group intends to explore opportunities for providing guaranteed participation in the private sector to boost investments.

Climate change was a topic of importance for the newly-announced fund, with the WBG looking to build upon Egypt’s Nexus for Water, Food, and Energy platform and 2022 Country Climate and Development Report

WBG is also in discussion with Egypt’s government to finalize a development policy financing (DPF) program as the multilateral lender plans to place three pillars in the program – “enhancing economic competitiveness and improving the business environment, building macroeconomic resilience; and supporting the green transition.”

This program, anchored by the Country Partnership Framework with Egypt for 2023-2027, reflects the WBG’s long-term commitment to the country’s sustainable development.

Almost a year earlier, in March 2023, the World Bank previously announced a USD 7 billion (EGP 216 billion at the time) collaboration agreement with Egypt for the years 2023 to 2027 that aimed to increase private sector employment, improve health and education services, and bolster climate change adaptation.

Egypt’s existing WBG portfolio exceeds USD 8 billion (EGP 376.58 billion), sourced from the International Bank for Reconstruction and Development, the International Finance Corporation, and the Multilateral Investment Guarantee Agency.

The WBG’s announcement comes amid heightened international financial support for Egypt, including the recent expansion of the International Monetary Fund’s loan program to USD 8 billion (EGP 377.26 billion) and a substantial financial package from the European Union worth USD 8.06 billion (EGP 385.38 billion).

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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