The 8th annual meeting of the Asian Infrastructure Investment Bank (AIIB). Press Release.
Over Monday and Tuesday, Egypt hosted the AIIB’s eighth meeting in Sharm El Sheikh under the theme “Sustainable Growth in a Challenging World.”
The meeting was the first ever to be held in an African country and the first in-person the bank held since the outbreak of the COVID-19 pandemic in 2019.
In a panel discussion, Egypt’s Minister of Finance Mohamed Maait said that Egypt is anticipating receiving $1 billion in financing from the AIIB to support the private sector, with some of the money going to the construction of a metro line in Alexandria and credit lines to a number of banks.
He also noted that the bank will extend a guarantee worth 3.6 billion Chinese yuan (nearly $500 million) for Egypt’s anticipated issuance of the Yuan-denominated Panda bonds. Maait previously stated that the government plans to issue such bonds during the first half of FY2023/2024.
The minister stated that regional and global cooperation is a cornerstone in countering the economic challenges Egypt is facing, urging the multilateral development banks (MDBs) to play a role in providing the financing required to bridge the infrastructure gap in the African continent.
Speaking to Ahram Online, Egypt’s Minister of International Cooperation Rania Al-Mashat said the infrastructure gap in Africa is worth trillions of dollars, which needs innovative financing solutions to be bridged.
According to the latest estimate by the World Economic Forum, the global infrastructure gap is worth $15 trillion through 2040. For Africa, the continent needs $170 billion annually in order to overhaul its infrastructure; two-thirds of that is for entirely new infrastructure and the remainder for maintenance, according to estimates by the African Development Bank (AfDB).
Al-Mashat added that concessional and blended finances are crucial for developing countries and African economies to address such a gap and to attain sustainability for their economies.
“The point is how to move from just strategies to real practices. Also, the global financing structure needs to be reconsidered for a just climate financing, especially for the African countries and the developing economies,” Al-Mashat told Ahram Online.
During the event, participants praised Egypt’s Nexus of Water, Food and Energy (NWFE) platform and the Sharm El-Sheikh Guidebook for Just Financing. Egypt released both while hosting the 27th UN Climate Change Conference in Sharm El Sheikh in November 2022. These efforts aim to accelerate climate action in the African continent.
“Sharm El-Sheikh Guidebook for Just Financing provides solutions and practical principles to enhance the viability of investment in climate projects and identifies the relevant parties in order to close the climate financing gap, it sets an actionable agenda for access to equitable financing,” the minister explained.
Al-Mashat noted that NWFE includes nine priority projects to mitigate and adapt to the repercussions of climate change, and works to mobilize climate investments, concessional development financing, debt swaps, and technical support, through joint cooperation with multilateral and bilateral development partners.
“Among these projects is enhancing adaptation in the northern Delta region affected by sea level rise ….[as well as] adapting crop production in the Nile Valley and Delta, and improving agricultural resilience in the face of climate change”, said Al-Mashat
Since Egypt became a founding member of the AIIB in 2016, the bank has provided $1.3 billion in funding to the public and private sector infrastructure projects in Egypt to promote sustainable and comprehensive economic development.
Egypt delivered the presidency of the upcoming AIIB’s annual meeting to Uzbekistan, which will host the ninth round of the meeting next year
Furthermore, Egypt signed a double taxation treaty with Croatia on the sidelines of the event, with a key objective of boosting commercial and investment relations between the two parties.
During the signage event, Maait said that Croatia is a gateway for Egyptian products into the European market. He called on Croatian investors to take advantage of incentives offered by Egypt, including the golden licence, the State Ownership Policy and the investment opportunities under the state’s Initial Public Offering (IPO) Programme.
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