The African Development Bank (AfDB) has a programme for Egypt’s small- and medium-sized enterprises (SMEs), approved last year, with funds of $800m through funding local banks, said Donald Kaberuka, AfDB’s president.
Kaberuka added that the bank is keen on Egypt’s energy sector, and will continue its support and investment in that sector.
Daily News Egypt talked to Kaberuka about the bank’s vision regarding the Egyptian economy and its promising business sector.
AfDB is interested in Egypt’s irrigation and energy sector – what is the bank’s plan regarding this?
First of all, we are interested in Egypt’s energy sector, as it is one of the nine biggest in the world. We have invested in the Ain Sokhna plant, Shubrah El-Kheima, Damietta, Cairo West, Al-Arish and Al-Kureimat Steam Power Station. The bank’s ongoing portfolio in Egypt consists of a total of 29 projects worth $1.9bn, divided into loans and grants, with the vast majority, around 79%, centred on the energy sector. We have a lot of projects in Egypt, and we are looking for renewable and non-renewable energy.
Egypt has borrowed from the AfDB, and has received a $1.7m grant because Egypt is not an AfDB country, so we lent to Egypt from the AfDB window. We lend to Egyptian businesses through the private sector window, through lending companies, such as the Egyptian Refining Company (ERC). The last loan provided to Egypt is $140m for extending Sharm El-Sheikh. The bank is considering providing $400m for the development of a wind power project in Egypt.
The bank announced it may finance, with a total of $8m, the Victoria-Mediterranean navigation line to link African countries. Could you tell us more about this?
We believe in developing all transport in Africa, as AfDB does roads and railways, and increasing railways is very interesting for developing the flow of transport. We are also interested in water and navigable transport. We are interested in expanding our investment in water transport alongside roads and railways. According to the amount of money, we look at what to give.
Will the bank plan to invest in Suez Canal Axis projects?
The bank is very interested in Suez Canal Axis projects and the New Suez Canal. The Suez Canal is the most important project and the core of those projects around it, in addition to the private sector projects in Egypt. The bank is considering some projects like energy, infrastructure and logistics.
What is the bank’s role in supporting Africa’s export-import movement?
We are looking to have 20% of all our infrastructure projects [in projects] that connect countries to each other, and also to connect power between countries. Economic integration in a single market is one of major components of the bank’s interest.
When will the implementation of the Sharm El-Sheikh airport extension happen?
The Sharm El-Sheikh extension project was approved two months ago with funds of $140m. The fund is co-financed between the AfDB and a Chinese fund, which will manage the project. However, the project implementation depends on the Egyptian government and depends on how fast they move, as our part is to approve the loan.
Is the bank interested in investing in Egypt’s agriculture sector?
I believe there is no work to help the agriculture, but so far, our attention has been in the energy and transportation sectors, as well as SMEs, as we are keen on SMEs. However, the AfDB approved a €50.20m loan for National Drainage Programme to boost agriculture in Egypt.
How much is the portfolio dedicated for SMEs sector in Egypt?
We have a programme, which was approved last year, which is $800m, through funding local banks, as we choose the bank by country which are good and have strong interest in the SMEs sector.
What is your opinion on the Egyptian economy?
I’m very impressed by the recovery of the Egyptian economy during the events which saw Egypt downgraded several times, due to political issues and its reserves were coming down also. But now, the country and its outlook are being upgraded, and reserves are increasing and more flows [are coming in] from the Middle East. In general, the economy is much more positive in the Middle East.