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Sunday, 19 July 2020

Egypt has landed c. USD 6.1 bn in loans and other financing from Afreximbank, European Investment Bank

DEBT WATCH- Egypt has landed c. USD 6.1 bn in loans and other financing from Afreximbank, European Investment Bank. The African Export-Import Bank (Afreximbank) has earmarked USD 3.9 bn for Egypt to mitigate covid-19 fallout and stimulate trade with the rest of the continent. Afreximbank has disbursed USD 3.55 bn to Egypt’s banking sector under its Pandemic Trade Impact Mitigation Facility (Patifma), the regional lender said in a statement. Afreximbank has also signed off on a further USD 300 mn to the National Bank of Egypt to encourage intra-African trade, as well as a USD 250k grant to the government to support covid-19 relief efforts.

Proceeds provided to banks under Patifma will help shore up the sector’s FX liquidity. Credit facilities under this program aim to prevent disruptions in trade and avert defaults, Afreximbank President Benedict Oramah said. “Egypt has been a regional banking powerhouse for more than a century and will play a vital role in expanding intra-Africa trade as the continent recovers from the pandemic and reaps the benefits of the African Continental FreeTrade Area,” he added.

Separately, we’re getting EUR 1.9 bn from the European Investment Bank (EIB), which signed off last week on a combined EUR 1.9 bn in new financing, according to a statement. The funding includes EUR 800 mn for “covid-19 related business investment” and another EUR 1.1 bn for public transport infrastructure development across the country, the statement says. The pandemic-related investment is designed to “improve public health, strengthen public services and back investment by companies in sectors hit by the pandemic.” The EIB had said last month it was looking at a potential EUR 670 mn financing package for Egypt and some of its developing neighbors to help combat the pandemic.

The EIB funding is part of a EUR 16.6 bn package for “covid-19 health response and economic resilience, climate, clean transport, energy and housing” across its footprint, the bank said.

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