The European Bank for Reconstruction and Development (EBRD) is providing a $200 million financing package to the National Bank of Egypt (NBE) for trade and on-lending to local companies impacted by the coronavirus pandemic, the EBRD announced on Monday.
Under this facility, the EBRD will provide a $100 million loan to help the NBE provide short-term loans to private small and medium-sized enterprises and firms facing liquidity strains due to a decrease in their activities and turnover caused by the crisis, according to a statement.
In addition, the Bank is increasing an existing uncommitted trade finance limit for the NBE by $100 million under the EBRD’s Trade Facilitation Programme to reach $300 million, to help meet the increased demand for import and export transactions amid the COVID-19 crisis.
EBRD First Vice President Jurgen Rigterink said that Egypt’s domestic small businesses are the backbone of the country’s economy, adding that strengthening this segment of the Egyptian economy has never been more important than during the ongoing crisis.
NBE Chairman Hisham Okasha said that the NBE is committed to minimising the economic and financial impact of COVID-19 on the Egyptian economy and the NBE’s customers in particular.
Okasha said this new facility, under the EBRD’s Solidarity Package, targets a crucial segment of the economy, “which we will continue to support, thus ensuring its resilience.”
“The facility comes on the heels of an increase of $100 million in our trade finance programme with the EBRD as well as the signing of a package in the amount of $150 million to support young people in business, skills in business and green climate financing,” he said.
In response to the coronavirus pandemic, the EBRD now expects to dedicate the entirety of its activities in 2020-2021 to combating the economic impact of the crisis and stands ready to provide support worth up to €21 billion over this period in the 38 emerging economies where it invests.
The NBE is the largest commercial bank in Egypt. Since cooperation with the EBRD began in 2013, credit and trade finance lines have been signed, including in support of women in business and to strengthen energy efficiency, according to the EBRD’s statement.
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the EBRD has invested close to €6.5 billion in 115 projects in the country.