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Thursday, 27 December 2018

World Bank expects Egypt reforms for USD 1 bn loan facility

No surprise in reported conditions document for USD 1 bn World Bank loan: Conditions and policy priorities for a USD 1 bn loan to Egypt offered by the World Bank earlier this month are exactly what you would expect: improve the business climate, support SMEs and entrepreneurship, curb energy subsidies, and come up with a strategy for debt control. The conditions for the two-part facility are laid out in a supporting document reported on yesterday by the financial daily Al Mal. The conditions dovetail with those the IMF has in place for the release of the fifth USD 2 bn tranche of its USD 12 bn bailout package for Egypt. The IMF has reportedly made the tranche’s release contingent on the implementation of a mechanism through which Egypt will peg fuel prices to the global market.

Another spoonful of financing to help the medicine of reform go down: The World Bank document adds that it is planning to provide Egypt with a separate USD 500 mn financing package for social safety programs to protect the most vulnerable in society as the Sisi administration pushes ahead with reforms, Al Mal reports.

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