World Bank approves latest US$1 billion loan for Egypt

WASHINGTON: The World Bank approved the latest loan for Egypt of just over US$1 billion to support the country’s economic reform programme and reduce poverty.

The loan is the last in a threepart package worth a total of US$ 3.15 billion that started in 2015, the World Bank said in a statement.

The loan will support “homegrown inclusive reforms” aimed at shoring up the economy and creating jobs, the bank said.

“We are privileged to support the country on its path to achieving its full potential and improving living standards for all Egyptians,” senior World Bank official Asad Alam said.

The African Development Bank is providing parallel financing of US$ 500 million and Britain added US$ 150 million.

The International Monetary Fund last month reached an agreement with authorities in Cairo to release the third US$ 2 billion tranche of a US$ 12 billion loan package agreed in November 2016, and the IMF board is expected to approve the release of the funds by the end of the year.

Since the 2011 revolt against Hosni Mubarak, the Arab world’s most populous country has seen a sharp decline in tourism revenue and reduced foreign investment, caused by political instability and security issues.

To obtain the IMF lifeline, Cairo undertook drastic reforms, adopting value added tax, cutting public energy subsidies and in November floated the exchange rate of the Egyptian pound.

The World Bank praised the country as a model on how to maximize finance for development, including “mobilizing US$ 17 billion of private investment in the energy sector.”

The bank focuses on projects to help Egypt reduce poverty, including social safety nets, transport, rural water and sanitation, agriculture and irrigation, housing, health care, and financing for micro and small enterprises.

It currently has a portfolio of 19 projects in the country with a total commitment of US$ 7.8 billion.