CAIRO: The World Bank Group said on Monday it intends to provide more than $6 billion of support over the coming three years to Egypt, which has been struggling with a foreign currency crunch and gaping budget and balance of payments deficits.
The World Bank Group said $3 billion will go towards government programmes and $3 billion to the private sector, all subject to the group’s board approval.
The announcement follows Egypt’s signing on March 6 of a loan agreement with the International Monetary Fund that expanded IMF support to Egypt by $5 billion and by an announcement on Sunday of $8.1 billion euros in financing from the European Union.
Egypt’s central bank on March 6 let the pound plummet and said it would allow the currency to trade freely. The currency had been fixed against the dollar for 12 months.
Some $3 billion of the World Bank financing will be distributed to the government and its programmes over three years, with the first $1 billion expected to arrive by the end of June, Egypt country director Stephane Guimbert told Reuters.
“Some significant part of that will go to budget support. and then we have a range of programmes on climate, on SMEs (small and medium-sized enterprises), etc.,” Guimbert said.
Another $3 billion will be directed through the World Bank Group’s private sector arm, the International Finance Corporation (IFC), including through equity and loans, and will be made up partly by funds mobilised from other investors.
The financing is still subject to the group’s board approval, which is expected before the end of June, Guimbert said. “And then we’ll disburse as soon as we can after that.”
The World Bank programme will focus in part on helping state-owned enterprises “that are not sold, that remain within government control, and the way they are managed, including levelling the playing field with the private sector”, he said.
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