The disbursement will be used to reduce short-term financing pressures, extend debt maturities, and expand fiscal space for spending on human development programmes, as per Egypt’s economic reform programme, according to Planning Minister Rania Al-Mashat.
Approval for the payment followed the implementation of 16 economic and structural measures required by the EU.
The measures are part of Egypt’s efforts to seek external financing for macroeconomic stability. They also support Egypt's aspirations to build a stronger and greener economy.
The President of the European Commission, Ursula von der Leyen, stated that the funding will be allocated to support Egypt's economic stability, democracy, sustainability, and the rule of law.
On the other hand, EU Ambassador to Egypt, Angelina Eichhorst, who met Al-Mashat on Thursday, underlined that this tranche of €1 billion reflects Egypt's commitment to defining and implementing key economic and political reforms that set the stage for further growth and development.
“I am very pleased with the unprecedented dynamism of the EU partnership with Egypt, which brings many tangible results”, the ambassador asserted.
The country has implemented economic reforms to achieve sustainability and resilience, improving public financial management and foreign exchange market operations. Progress is being made on green transitioning in water management and energy, as well as improving the business environment and competitiveness, through bidding for industrial land allocation and facilitated online licensing.
Egypt is also improving the investment climate against pressures on foreign currency inflows and public finances.
Furthermore, the €7.4 billion financing package falls under the Macro-Financial Assistance & Budget Support Mechanism (MFA), which includes €5 billion in concessional loans for macro-financial support, €1.8 billion in investment financing under the EU’s Southern Neighbourhood Economic Investment Plan, and €600 million in grants, including €200 million earmarked for migration-related programmes.
The MFA installments will also support Egypt’s economy in accordance with the International Monetary Fund’s (IMF) standards. The Fund has noted an improvement in the balance of payments, with the current account deficit narrowing as remittances and tourism receipts remained strong and non-oil exports recorded solid growth.
The IMF, however, emphasized the need for accelerated reforms to aid in private sector-led growth. Egypt recently raised its target for annual GDP growth to 7.5 percent by 2030, with the private sector’s contribution to GDP projected to reach 72 percent.
The IMF reached a staff-level agreement with Egypt last month on the fifth and sixth reviews of the Extended Fund Facility (EFF) programme and the first review under the Resilience and Sustainability Facility (RSF). The reviews are pending the approval of the IMF’s Executive Board and will unlock around $2.5 billion for the country.
The newly received €1 billion tranche is also part of agreements inked during the Egypt-EU Summit in October 2025, where both parties signed a new €4 billion deal to support the Egyptian economy.
In March 2024, Egypt and the EU signed a Strategic and Comprehensive Partnership that covers political cooperation, economic stability, trade and investment, migration, security, and skills development.
Short link: