The loan will also strengthen farmers’ agribusinesses and improve their financial wellbeing through financing purchases of various agricultural commodities such as hazelnuts, dry dairy products, grain and onions in selected countries of operation.
The proceeds of the proposed loan will be on-lent to local private small and medium-sized enterprises and to corporates, supporting them in bridging liquidity needs.
The loan agreement was signed by Minister of International Cooperation, Rania Al-Mashat, and Chairman of the Fund Abdul Rahman bin Abdullah Al-Hamidi.
Abu El Naga clarified that the first tranche worth $2 billion.
EBRD will provide a $100 million loan to help NBE provide short-term loans to private small and medium-sized enterprises and firms facing liquidity strains.
The project would help meet the Government’s financing requirements, expand social expenditures to mitigate the socio-economic impact of the pandemic.
The coronavirus crisis has battered Egypt’s finances by shutting down tourism, denting remittances from Egyptians working abroad and triggering capital flight.
The financing comes for the completion of the project of improving the performance of the oil and gas sector in Egypt.
The decree stipulates amendment of the first loan agreement signed on March 13, 2018 between the Arab Republic of Egypt and Kuwaiti Fund for Arab Economic Development.
The banks should be encouraged to be part of an initiative offering loans of 8 percent diminishing balance interest rate to private investors in certain sectors.
Ma’it added that the state treasury will bear the loan’s burden until the company achieves operating rates equivalent to 80 percent of the operating volume in 2019.
He said the economic reform program which Egypt put into effect in 2016 managed to create a strong economy capable of containing crises.
On the $6 billion financing package expected from the IMF, Deputy Governor of the Central Bank of Egypt (CBE) said that negotiations haven’t ended yet.
The loan, which will be paid back over a period of five years, comes as part of the the Rapid Financing Instrument (RFI) program.
The Executive Board of the International Monetary Fund (IMF) approved Egypt’s request for emergency financial assistance of SDR 2,037.1 million ($2.772 billion)
In April, Egypt's Prime Minister Moustafa Madbouli asked the IMF for financial support to help the country deal with the new coronavirus outbreak.
There are negative and positive aspects.
Georgieva added that the Central Bank of Egypt has also implemented timely measures to support the domestic economy.
This package is to enhance the state’s capabilities to face the new COVID-19 virus crisis, in a proactive step based on the successful implementation of the economic reform program.
The duration can be prolonged, if needed.