Egypt secures $1.6bn loan from Islamic Development Bank

Egypt has secured $1.6 billion loan from Jeddah-based Islamic Development Bank (IsDB) Group to support its critical sectors and encourage private sector participation in economic growth.

The government has signed a $1.5 billion deal with Islamic Trade Finance Corporation (ITFC), which is part of a five-year framework valued at $6 billion to enhance Egypt’s development across the energy sector and support food security.

As part of the package, $700 million will be granted to Egypt’s General Authority for Supply Commodities and $800 million to Egyptian General Petroleum Corporation.

The Islamic Corporation for the Development of the Private Sector, another member of IsDB Group, will provide $100 million to fund small and medium-sized enterprises, as well as large private sector companies operating in strategic sectors

These initiative will boost Egypt’s economic development, support exporters, and create job opportunities for youth and women.

Last month, Cairo announced plans to raise up to $40 billion through its global medium-term note programme.

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The net proceeds will be used to finance a portion of the fiscal deficit or any other purpose outlined in the state budget law, according to a base offering circular published on the London Stock Exchange (LSE).

In January, local media reported that Egypt was aiming to strike a deal with the European Union to secure €4 billion ($4.2 billion) in financing to back its current reform agenda.

Egypt was expecting to receive $1.2 billion from the International Monetary Fund in January. It initially signed a $3 billion, 46-month extended fund facility agreement with the fund in December 2022.