The European Investment Bank’s (EIB) board has approved an outline finance worth €1.9 billion for Egypt to finance projects in transport and to support the small and medium-sized enterprises (SMEs) sector amid the COVID-19 crisis, Minister of International Cooperation Rania Al-Mashat announced on Sunday.
The loan provides €1.1 billion for the National Authority for Tunnels (NAT) to implement three projects and allocates €800 million for the National Bank of Egypt (NBE) to back SME projects in countering the impact of COVID-19, according to Al-Mashat.
The minister added that the new loans came as a result of the EIB’s mission visit in February, headed by EU Neighbouring Countries at EIB Flavia Palanza.
For the €1.1 billion loan, Al-Mashat clarified that it supports the vital Egyptian transport sector, which contributes 4.6 percent to Egypt’s GDP and provides about 6.2 percent of job opportunities in domestic market.
She added that the railways serve 500 million passengers annually on average, adding that the current project portfolio in the Egyptian transport sector records $5 billion, covering 30 projects financed by the EIB, the World Bank Group, the European Bank for Reconstruction and Development (EBRD), in addition to Japan, China, Korea and France.
For his part, Egypt’s Minister of Transport Kamel El-Wazir said that the loan for the transport sector includes €240 million, out of €500 million, that will be used in the project to renovate the second line of the Cairo Metro.
He added that EBRD and Agence Francaise de Developpement (AFD) have showed their willingness to provide the remainder finance.
Regarding the €800 million loan, Minister Al-Mashat illustrated that it aims at providing liquidity for the SMEs to support their working capital needs and capital spending, in addition to creating new job opportunities in the local market, through which the SMEs be able to grow and support the national economy.
The EIB has introduced total finances worth around €9.7 billion since the start of the bilateral strategic partnership in 1979, while the ongoing portfolio records €2.3 billion, Al-Mashat stated.
She added that the new loan came in line with the global partnership vision that the ministry adopts (People, Projects and Purpose), which aims to support sustainable development in Egypt.
Meanwhile, head of the EIB’s Cairo office Alfredo Abad declared that the new loan came in line with the EIB’s commitment to The Paris Agreement, which is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC), dealing with greenhouse-gas-emissions mitigation, adaptation, and finance, signed in 2016.
In 8 February, Egypt welcomed the EIB visiting mission.
The visit resulted in inking a joint agreement outlining five pillars of future cooperation, including backing the funding of the public and private sectors, expanding the finances for the projects to provide cleaning water, sewage system, energy, transport and SMEs, in addition to supporting the fight against climate change and mitigating their consequences alongside promoting the health and education sectors.
