The new loan aims to reduce the country’s fiscal gap, and help ease the pressure on the Egyptian economy caused by the on-going pandemic
Japan and Egypt have signed a budget support loan agreement, providing 25 billion Japanese Yen (Equivalent of around $237 million) to Egypt as part of the “Development Policy Loan for Power Sector Reform”.
This is currently the largest loan since the second loan for the Grand Egyptian Museum (GEM) and a loan for the electricity sector, both of which were signed in October 2016. It is important to note that the loan is not limited to supporting power sector reform.
The loan agreement was signed by Japan Ambassador to Cairo Masaki Noke and Egypt’s Minister of International Cooperation Rania Al-Mashat.
The new loan aims to reduce the country’s fiscal gap, and help ease the pressure on the Egyptian economy caused by the on-going pandemic.
It added that the funding is expected to boost the liquidity for Egypt while supporting critical reforms for improving the governance and financial sustainability of power sector, boosting green growth and renewable energy and moving towards a competitive market for enhanced private sector participation.
In his statement, Ambassador Noke explained that the goal of the loan is to support the electricity sector reform, one of the key priorities in “The Sustainable Development Strategy (SDS): Egypt Vision 2030”.
He stressed that this support is also expected to encourage Egypt’s role as a regional hub for electricity and energy and be beneficial for the region. This is thanks to Egypt’s geopolitical significance as a hub in the Middle East, Africa and Europe, with Ambassador Noke noting Egypt’s importance for the realization of the “Free and Open Indo-Pacific”.
The Development Policy loan is a co-financing program in partnership with the African Development Bank (AfDB); as a first collaboration in Egypt under the 4th phase of the Enhanced Private Sector Assistance for Africa (EPSA) initiative – announced by the Government of Japan and the AfDB in the Tokyo International Conference on African Development (TICAD 7) and is also in collaboration with the French Development Agency for a collective financing of Euro 500 million from the 3 partners.
The Ambassador said that this loan is an expression of solidarity from the Japanese people towards their Egyptian friends during the challenges of COVID-19.
In the context of the fight against COVID-19, Japan has been working with Egypt very closely. For instance, Japan agreed to grant ¥1 billion ($9.5 million) for the procurement of CT scanners and other medical equipment for Egyptian hospitals.
