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Tuesday, 10 July 2018

Egypt requests USD 2 bn in funding from the World Bank

EXCLUSIVE- Egypt requests USD 2 bn in funding from the World Bank: The Madbouly government has put in a request for a USD 2 bn facility from the World Bank to help “support Egypt’s economic reform measures,” a senior government official tells us. The source declined to provide further details, but said the request was formally made yesterday during a meeting between a visiting delegation from the global lender and the Madbouly Cabinet. Egypt had last borrowed USD 3 bn from the World Bank to support policy reforms, the third disbursement of which had arrived late last year.

Background and expectations: Prime Minister Mostafa Madbouly has requested USD 500 mn in funding for social housing development, according to a cabinet statement. Madbouly has also requested help coming up with a strategy to incorporate the private sector into social housing projects. Meanwhile, news reports earlier this month claimed that Transportation Minister Hisham Arafat had resumed talks with a World Bank delegation for additional funding for railway and river transport projects. The World Bank is already providing Egypt with more than USD 500 mn in separate loans for railway development projects. Egypt has borrowed USD 500 mn from the World Bank for social housing development, the cabinet statement noted. Most recently, the World Bank had pledged USD 530 mn in funding to support Egypt’s healthcare system. Notably, the cabinet statement also noted that Madbouly discussed with ministers his government’s plan for the development of Sinai.

Gov’t doesn’t need WB, Afrexim funding to plug current budget shortfall: News of the USD 2 bn funding request — which could take the form of one or more facilities — comes as Vice Minister of Finance Ahmed Kouchouk said Egypt is unlikely to seek new loans from the World Bank and African Export-Import Bank to support the budget in the current fiscal year, according to Al Mal reports. Around USD 4 bn in loan disbursements from the IMF combined with USD 4-6 bn raised from eurobond sales in FY2018-19 should be sufficient to help the government close the financing gap for the year, according to Kouchouk. Ex-finance minister Amr El Garhy had previously said that Egypt was planning to issue USD 6-7 bn-worth of eurobonds in FY2018-19.

And speaking of the World Bank: The institution has appointed Egypt’s Hafez Ghanem as its new vice president for Africa, according to a World Bank statement. Ghanem, who previously worked as World Bank’s VP for MENA, succeeds Makhtar Diop.

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