CDC, the United Kingdom’s development financial institution, revealed on Tuesday, that it has been granted approval by the Central Bank of Egypt to provide Tier 2 capital of as much as $200m to the Egyptian banking sector.
CDC is the first bilateral development finance institution to be given clearance to provide Tier 2 capital to Egypt’s banking sector. CDC is currently in discussions with a number of Egyptian banks with a view to providing funding that will support their loan book expansion, bringing new products to their MSME (micro, small and medium-sized businesses) and export-orientated customers.
“Supporting Egypt’s banking sector is a stepping stone for CDC to support the country’s private sector, in particular small and medium sized businesses which are the bedrock of job creation and economic growth in the country. Today’s decision will allow us to play a role in building a healthy, well-capitalised banking sector in Egypt,” said CDC’s Chief Executive, Nick O’Donohoe
O’Donohoe added that the CDC will appoint a country representative this year to build long-term partnerships and invest more in Egypt.
Last year the CDC announced its ambition to invest up to $4.5bn more across Africa over the four years up to 2022.
International Trade Secretary, Liam Fox, said: “The appetite of British companies to invest in Egypt’s future is growing. Last year, we saw the CDC support the Benban Solar Park and this year it plans to commit millions to Egyptian banks to assist them in developing this country’s economy. These investments clearly reflect the UK’s commitment to Egypt and its people.”
In November 2017, the CDC provided a loan of $97m to the 800MW Nubian Suns solar power project as part of a larger financing package that will help Egypt reach its green energy targets and create thousands of jobs.