The Egyptian government is looking to raise a loan of more than $1 billion and has tapped lenders in the United Arab Emirates (UAE) for financing help, three sources familiar with the deal said.
The coronavirus crisis has battered Egypt’s finances by shutting down tourism, denting remittances from Egyptians working abroad and triggering capital flight.
Egypt obtained $2.77 billion in emergency financing from the International Monetary Fund (IMF) in May and this month reached staff-level agreement for a one-year, $5.2 billion standby loan.
It also raised $5 billion in bonds in May.
Emirates NBD and First Abu Dhabi Bank are helping to arrange the new loan and have reached out to other lenders as well, the sources said. Two of the sources said the loan would have a maturity of one year.
The Egyptian government, Emirates NBD and FAB did not immediately respond to requests for comment. The sources declined to be named because the information is not public.
Egypt’s foreign reserves declined by $5.4 billion in March, $3.07 billion in April and $1 billion in May as the COVID-19 crisis chipped away at sources of foreign currency.
Egypt received $13 billion in tourism revenue and $26 billion from remittances last year. The government says tourism represents 5% of GDP, but analysts say the figure may be as high as 15% with indirect jobs, spending and investment too.