Egyptian-American Enterprise Fund launched: MENA

Ahram Online, Wednesday 24 Apr 2013

New fund hopes to bolster national economy by investing $300 million in Egyptian small- and medium-sized enterprises

The Egyptian-American Enterprise Fund has been officially launched, fund chairman James Harmon announced at a Wednesday press conference, state news agency MENA reported.

With an initial capital of $60 million from the US government, the fund expects to invest $300 million in Egypt over the next three years, according to Harmon.

The not-for-profit, privately-managed corporation will focus on financing small- and medium-sized enterprises, with an emphasis on healthcare, agriculture and recycling.

During his March visit to Egypt, US Secretary of State John Kerry described the fund as part of Washington's effort to provide "direct support to key engines of democratic change in Egypt, including Egypt's entrepreneurs and its young people."

The US has pledged $450 million in budget support funds to Egypt on the condition that it continue its efforts to secure a $4.8 billion IMF loan, which will require the Egyptian government to institute drastic economic reforms.

"As Egypt continues to make progress with the IMF on a solid programme to stabilise and grow your economy, the United States will continue to support Egypt with additional assistance," US ambassador to Egypt Anne Patterson declared at a US-Egypt Budget Support Agreement signing ceremony in March.

On Wednesday, MENA quoted an IMF official as saying that Egypt could reach a deal on the long-awaited loan by the end of May.

Abdel-Shakour Shaalan, IMF executive director for the Arab region, said that Egypt would obtain the loan in several phases starting with a first tranche of roughly $2 billion.

The IMF loan is widely seen as vital to unlocking other sources of foreign investment to Egypt, whose foreign exchange reserves have plunged since its January 2011 revolution.

Harmon added that discussions were ongoing with Arab and Asian nations regarding possible contributions to the fund, which hopes to boost its overall capital to $1 billion within the next three years.

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