Photo: Ministry of International Cooperation
The International Finance Corporation (IFC), a member of the World Bank Group, has pledged up to $2 billion to Egypt in new investments over the next three years, underlining its support for the country's private sector, the IFC said in an emailed statement on Thursday.
During his first official trip to Cairo, from 14 to 16 December, Philippe Le Houérou, the IFC's executive vice president and CEO, finalized a number of investment deals pledging ongoing support for job creation, entrepreneurship, innovation and infrastructure development in Egypt.
Le Houérou said the IFC "would stand by Egypt as is enacts a series of economic reforms meant to spur investment and jump-start growth," the statement read.
The IFC signed a $2 million investment deal in equity financing to Flat6Labs Cairo, a leading regional accelerator and seed fund, which will invest in about 100 Egyptian tech startups and support more than 300 entrepreneurs over the next five years.
Le Houérou finalized a $10 million investment to Algebra Ventures, the first Egypt-dedicated venture capital fund to come to market since 2008.
He also signed a $20 million equity financing agreement with one of Egypt's largest private construction companies, Hassan Allam Holding, which employs 10 percent of the country's workforce.
"The country's recently announced economic reforms will help it capitalize on that promise — by breathing new life into the private sector, which can drive innovation and employment, and create lasting opportunities for all Egyptians," said Le Houérou.
On 11 November, the Central Bank of Egypt (CBE) confirmed that it had received an initial $2.75 billion from the International Monetary Fund (IMF) following the board’s approval for Egypt’s $12 billion loan.
Earlier this month, the CBE implemented a milestone in Egypt's economic reforms by floating the pound and raising key interest rates to alleviate a dollar shortage and stabilise the country's flagging economy.
According to the statement, the IFC has invested $2.8 billion in Egypt over the past decade, in addition to a wide range of advisory services to Egyptian businesses and government agencies.
In January, the CBE announced a four-year programme to increase financing of SMEs nationwide, as these businesses are key contributors to the state’s investment and production sectors.
With the country's ailing economy and unemployment at 12.5 percent in the second quarter of 2016, analysts believe SMEs represent a great opportunity to boost the economy and create jobs.
Egypt's economy has been struggling since 2011 due to a sharp drop in tourism and foreign investment, two main sources of hard currency for the import-dependent country.