Egypt, IFC ink two agreements to support MSMEs, healthcare

Doaa A.Moneim , Sunday 12 May 2024

Banque du Caire and the International Finance Corporation (IFC), a member of the World Bank Group, signed on Sunday a financing agreement worth $100 million.

 Egypt, IFC


The agreement includes $50 million to support the development efforts of micro, small, and medium private sector projects, with a focus on financing projects owned by women entrepreneurs.

An additional $50 million is allocated for trade financing under the IFC’s International Trade Finance Programme.

The two sides signed the agreements during IFC Day in Egypt, which kicked off in Cairo on Sunday.

The event was attended by Prime Minister Mostafa Madbouly and the ministers of planning, finance, communications, and public business, along with a group of bank presidents and private sector companies.

Egypt’s Minister of International Cooperation Rania Al-Mashat emphasized this agreement is not the first of its kind, as the corporation has previously financed the country’s first green bonds for the private sector, providing $100 million to the International Finance Corporation, thus supporting green transformation efforts and emissions reduction.

The minister added that the Ministry of International Cooperation is committed, in line with presidential directives, to supporting and empowering the private sector by enhancing relations with multilateral and bilateral development partners, exploring more available financing tools for various private sector companies in Egypt, providing both direct and indirect financing options.

The Egyptian private sector has received $10.3 billion in facilitated development financing between 2020 and 2023 in the form of direct financing, investment contributions, technical support, and credit lines.

Moreover, a consultancy services agreement for the comprehensive health insurance system of the IFC was signed between Minister of Finance Mohamed Maait and the chairman of the General Authority for Comprehensive Health Insurance.

The agreement aims to strengthen the measures taken in cooperation with development partners to support the system in Egypt. This enhances the state's efforts to provide comprehensive healthcare services and health insurance coverage for all citizens by contracting with a network of private sector healthcare providers.

Al-Mashat said that in pursuit of this goal, efforts with development partners have succeeded in providing facilitated development financing amounting to $900 million, including $400 million from the World Bank, $181.6 million from the French Development Agency, and $326.7 million from the Japanese side. 

According to the agreement, the International Finance Corporation, drawing on its accumulated experience in dealing with the private sector in more than 100 countries worldwide, will analyze contracting systems with the private sector, hold consultations with relevant parties, provide technical support and consultations for contracting with private sector healthcare providers, and offer technical support to the General Authority for Comprehensive Health Insurance, among other provisions that achieve the desired project objectives.

IFC support for Egypt

In her opening speech, Al-Mashat noted that IFC Day in Egypt has become an annual meeting, through which both sides affirms their commitment to support the private sector, in line with the directives of the President Abdel-Fattah El-Sisi.

“In my capacity as governor of Egypt at the World Bank Group, our relationship with the IFC comes within a broader Country Partnership Framework, launched in 2023, with the bank and its affiliated institutions: the Multilateral Investment Guarantee Agency (MIGA) and the International Bank for Reconstruction and Development (IBRD). It focuses on several goals, most notably creating a supportive environment for private sector-led investments and creating job opportunities,” Al-Mashat detailed.

Egypt appointed the IFC as a technical advisor for the government’s IPO programme that includes 40 state-run companies in line with the country’s IMF-backed $8 loan deal.

IFC investments in Egypt

Al-Mashat highlighted the relationship with the IFC, which has provided financing and investments to the private sector worth approximately $9 billion, in addition to a portfolio of advisory services worth $34 million, since the institution began its work in Egypt, making Egypt one of the largest countries of operation for the IFC.

IFC investments in Egypt are diversified in many fields, most notably sustainable infrastructure, renewable energy, financial services, agribusiness, manufacturing, startups, investment funds, and health. They are not limited to large companies only but are also directed to startups and entrepreneurs and small and medium enterprises.

Increasing the private sector’s share in Egypt’s economy

During a meeting with the IFC’s officials on the sidelines of the event, Madbouly stated that Egypt aims to raise private sector participation in the country’s economy to 65 percent in line with Egypt’s State Ownership Policy.

He added that the private sector is a key contributor to the country’s economy, stressing that it enables the state to address the implications of external shocks.

Within his speech at IFC Day, Madbouly stated that the Egyptian government engages with the World Bank and the European Union for the sake of maintaining the Egyptian economy’s flexibility and adapting it against global shocks.

In this respect, Madbouly said that Egypt will receive $5 billion from the EU till 2027.

Minister of Planning and Economic Development Hala El-Said said during the event that the private sector’s share in the Egyptian economy has been raised from 30 percent over the past two years to 40 percent in 2024 and will reach 50 percent in 2025.

IFC Day in Egypt was also attended by Sergio Pimenta, VP of the IFC for the Africa Region.

The World Bank has recently committed $6 billion to support Egypt's economy amid the ongoing global and regional tensions. $3 billion of which will be directed to support the country's budget, with about $1 billion set to be unlocked annually till 2026. The remaining $3 billion will be leveraged by the privates sector over the same course of time.

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