World Bank and African Fund visit Egypt to negotiate loans

Nevine Kamel, Saturday 17 Oct 2015

Egypt is currently negotiating loans worth over $8 billion with the two international financial institutions

World Bank Group President Jim Yong Kim
World Bank Group President Jim Yong Kim (Photo: Reuters)

A World Bank (WB) and African Fund delegation is currently visiting Egypt for some days, Minister of International Cooperation Sahar Nasr told Ahram Online on the sidelines of the International Monetary Fund-WB annual meetings.

The Egyptian government seeks to pick the best financial packages from the two international institutions, which began their visit Thursday for this purpose.

Negotiations on loans began during the annual IMF-WB meetings in Lima, Peru last week, when also the country visit was decided, said Nasr.

Egypt is negotiating a $3 billion loan from the World Bank, in addition to $1.5 billion from the African Fund to support development programmes in the state budget, according to Nasr.

"This type of funding is ready and available while the government decides how to allocate it in its different developmental programmes," Nasr added.

Additionally, the government seeks to negotiate another $2 billion loan from the World Bank and $1.5 billion from the African Fund to finance national projects, according to the minister.

"This amount is allocated to Egypt by the international financial institutions in support reforms adopted by the government. They are also a right of the Egyptian government, as Egypt is a founding member in these institutions with a share in their capital," said Nasr.

Interest rates on these loans are less than two percent with a 35-year repayment scheme and five-year grace period. "These are soft terms to suit the nature of the developmental programmes adopted by the government," Nasr said.

The government is still in the negotiation phase through which the exact value of the loans will be decided based on the best offer and government priorities "to better serve the economy and the Egyptian citizen," Nasr said.

State-owned news agency MENA had reported Thursday, quoting Nasr, that the government is negotiating a $5.5 billion loan with the IMF. But according to Nasr, negotiations are with the African Fund and the World Bank, in cooperation with the IMF.

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