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Tuesday, 24 November 2020

International financial institutions ready to support development of Egypt’s state-owned companies

Doaa A.Moneim , Monday 29 Jun 2020
Rania Al-Mashat
Egypt’s Minister of International Cooperation Rania Al-Mashat (Photo: Al-Ahram)
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A number of international financial institutions have expressed their willingness to support Egypt’s plans to upgrade its state-owned companies, the Ministry of International Cooperation said in a statement.

The World Bank Group is looking forward to support state-owned firms' reform process in Egypt through enhancing the technical support and private capital utilisation, International Finance Corporation's (IFC) Country Manager for Egypt, Libya and Yemen Walid Labadi said.

Labadi made his comments during a video conference held on Monday with Egypt’s Minister of International Cooperation Rania El-Mashat, Minister of Public Enterprise Hisham Tawfik and representatives of international financial institutions.

Labadi stressed that the reform process in such a sector constitutes a crucial action regarding the second wave of Egypt’s economic reforms.

He added that the plan that the public enterprise ministry has set that purpose as decisive to develop the state-owned companies.

Meanwhile, El-Mashat said the meeting came to bosst relations between Egypt, its global development partners, and international financial institutions to exchange the best practices and experiences that help state-owned companies' restructuring programmes and them implement the expansionary plan of the Egyptian Aluminium Company (EGAL).

EGAL's expansionary plan, estimated at EGP 13 billion, aims to increase companies’ production by 250,000 tonnes annually.

Vice President of the European Bank for Reconstruction and Development (EBRD) Khaled Hamza said the bank is eager to participate in such efforts and in expanding the private sector partnership in the manufacturing process in the domestic market.

Since 2018, the public enterprise ministry has adopted a plan to develop 26 public-sector companies to optimise their output and reduce their losses through a restructuring programme and the initial public offering (IPO) programme that targets listing 22 state-owned companies in the stock exchange.

For this purpose, the cabinet decided, in February 2019, to set up a fund to settle their debts to the banking sector, provide the needed finance for the administrative and technical development of the state-owned companies and help remove financial bottlenecks.

On 22 January 2020, the cabinet approved a draft presidential decree on establishing the fund, affiliated to the public enterprise ministry.

Through financing the restructuring of the public enterprise companies, the fund targets settling the debts which these entities owe to the banking sector, as well as providing them with all the necessary support they need to carry out administrative and technical reforms.

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