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International financing institutions strong backers of Egypt - Daily News Egypt

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International financing institutions strong backers of Egypt

International financing institutions confirm attendance to Egypt’s Economic Summit this month


EEDCDaily News Egypt reviews the financial and advisory assistance provided to Egypt by international financing institutions by highlighting the most recent assistance provided to the country from a number of international funds.

IMF

The International Monetary Fund (IMF)’s managing director, Christine Lagarde, had previously confirmed the fund’s attendance to Egypt’s March Economic Summit.

In mid-February 2014, IMFMission Chief in Egypt Chris Jarvis told Daily News Egypt that so far, the Egyptian authorities have not requested IMF financing. He added, however,thatthe IMF would be ready to consider such a request when the authorities feel the time is opportune.

“As mentioned by managing director Christine Lagarde more than once, the IMF stands ready to help Egypt and its people,” Jarvis said.

The IMF worked on its yearly Article 4 review or consultations in late 2014 with the Egyptian authorities, which involved a team of economists visiting Egypt to assess its economic and financial developments. Discussions concerning the economic and financial policies were made with the Egyptian government and the Central Bank of Egypt (CBE) during the visit.

The IMF has been further providing continuous technical assistance to the Egyptian authorities.

After the ouster of former president Hosni Mubarak in 2011, Egypt started negotiations with the IMF over a $4.8bn loan. The deal however was never sealed, mainly because Egyptdid not take any action to reform its food and energy subsidies programme.

In 2014,after Abdel Fattah Al-Sisi won the presidential elections, Egypt started taking IMF advice and began cutting fuel subsidies and takingon restructuring reforms.The moves taken were warmly welcomed by the IMF,and it agreed to conduct economic consultations for the first time with the Egyptian government by the end of 2014. The resumption of negotiations between both parties occurred after their indefinitesuspensionfollowing the election of former president Mohamed Morsi in June 2013.

The IMF is an independent international organisation, which has 188 member countries for which the IMF provides technical assistance and training. It also keeps track of the economic health of its member countries, and in some cases provides loans to countries facing difficulties.

KFAED

The Kuwait Fund for Arab Economic Development (KFAED) is participating in the Economic Summit, according to February statements made by Hesham Ibrahim, the Fund’s Deputy Director-General.

KFAEDalso announced in February it is studying the application of two electricity sector projects in Egypt worth $300m, marking the latest announcement by the fund concerning its support for Egypt.

In December 2014,Egypt and KFAED signed a loan agreement worth approximately $105mfor investing in a power plant project located west of Cairo.The financial support marked the 39th loan provided by KFAED since the beginning of its cooperation with Egypt in 1964.

Since it started its operations in Egypt, the fund has provided a total of approximately $2.4bn in loans that were injected for financing development projects in various sectors.

KFAED has also provided Egypt with nine grants and technical assistance with a total value of approximately $6.895m.Those were allocated for financing the technical and economic feasibility studies for some projects and for financing other events.

KFAED is an Arab fund that provides financial assistance to developing countries either through loans or grants. The Fundalso provides funding for the preparation of technical feasibility and economic studies to the countries it supports.

AFD

The French Agency for Development (AFD) is attending Egypt’sEconomic Summit according to Maha Nabil, AFD’s Communication and Administration Manager.

In February 2015,AFD agreed to fundthe development of small- and medium-sized enterprises (SMEs) in Egypt with funding worth EGP50m.

In the same month,the French ambassador to Cairo André Parant revealed that €3m worth of funding hasrecently been granted to Egypt for infrastructure projects by the AFD. He added that the AFD is ready to inject more finances into Egypt in the coming period.

The AFD is considered the lease arm of the French government in promoting the cooperation between Egypt and France since the establishment of the agency’s office in Cairo in January 2007.The agency has contributed a total amount of €800,475,000 until December 2014; the specified amount was used in financing a number of important projects in Egypt.

AFD has three main focuses inEgypt: promoting the development of a competitive, modern private sector; to improve the living conditions of the population;andpromoting a sustainable development respectful of the environment and of the country’s cultural heritage.

AFD has supported Egypt by financing it with loans and grants since it began its operation in the country.

 

AFESD

The Kuwaiti-based Arab Fund for Economic and Social Development (AFESD) is participating in the Economic Summit, with Abdlatif Al-Hamad, Director General and Chairman of the fund being a keynote speaker.

A number of concessional loans have been signed and confirmed between Egypt and AFESD, whereby the fund agreed on providing a loan worth $162m to the Egyptian-Saudi electricity linkage project.

In February 2015, Egyptian Prime Minister Ibrahim Mehleb met with Al-Hamad, where the latter expressed his willingness to complete the fund’s studies of providing loans to a number of projects in Egypt.These include two power station projects,one of which requires a KD 30m loan and the other requiring funding worth KD 60m.

Al-Hamad further welcomed the studying of providing another loan worth $100m for SFD to finance small and medium enterprises.

In March 2014, Egypt’s interim government signed two agreements with AFESD to finance projects in the electricity sector, with AFESD providinga $200m assistance package for funding the projects.

AFESD also signed a $50m loan agreement with the state-owned Social Development Fund (SFD) to finance small- and micro-enterprises.

AFESD provides its Arab member countries with assistance for economic and social development by funding public and private investment projects through loans and grants as well as expertise.

 

RDIF

The Russian Direct Investment Fund (RDIF) is participating in the EconomicSummit with the presence of Kirill Dmitriev, CEO of the fund, as an attendee and a keynote speaker.

During Russian President Vladimir Putin’s visit to Egypt in February 2015, an agreement was signed between RDIF and the Egyptian Ministry of Investment for enhancing investment cooperation between both countries.

The agreement meant that RDIF will provide the ministry with extensive technical assistance for the establishment of an Egyptian investment fund. RDIF will also be providing support to the ministry in order to attract international investors to the yet to be established Egyptian fund.

RDIF was established by the Russian government in 2011, and its main purpose is to make equity investments in the Russian economy.

 

EBRD

The European Bank for Reconstruction and development (EBRD) is participating in the Economic Summit with EBRD’s President, Sir Suma Chakrabarti, giving a keynote speech.

EBRD’s current portfolio of projects amounts to €739m, which are being operated in six main sectors, including energy, infrastructure, financial institutions, industry, agribusiness and commerce.

EBRD has supported a total of 21 projects in Egypt until December 2014, with cumulative investments worth €762m.

EBRB has four main focuses in Egypt and those are to upgrade transport & telecommunications services, modernise the financial sector, and develop the agribusiness sector and finally supporting domestic and infrastructure projects.

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