Egypt signs agreement with AfDB worth €145M to advance railway system

CAIRO – 23 May 2021: The Minister of International Cooperation Rania A. Al-Mashat signed Sunday a development financing agreement with the African Development Bank (AfDB) worth €145 million.

The agreement comes with the aim of improving efficiency and safety factors in the railway system by extending the authority's main lines (Alexandria / Cairo / Assiut / Naga Hammadi and Benha / Port Said line) with 953 km controlled by the European Train Control System (ETCS-L1) to manage the course of the cars.

It also provides an additional 100 wagons, using the ETCS.

This signing took place in the presence of Kamel Al-Wazir, the Minister of Transportation; Malinne Bloomberg, AfDB’s Country Manager in Egypt; and railway authority officials; all alongside the working groups of both ministries.

The Ministry of International Cooperation is focused on developing and strengthening economic cooperation relations between Egypt and international and regional organizations, and to provide funds for various development projects that pave the way towards Egypt’s 2030 Vision. This is also in line with supporting the Ministry of Transportation’s plans to modernize the railway system, serving millions of citizens on a daily basis.

Commenting on the newly signed agreement, Al-Mashat expressed that developing sustainable infrastructure for the transport sector enhances the Government of Egypt’s development plans. The Minister noted that, through multilateral and bilateral cooperation with development partners, the Ministry is able to provide development financing for the implementation of various development projects across multiple sectors. In the transportation sector, the signed agreement is designated for the improvement of services for citizens, and also the stimulation of private sector participation.

Al-Mashat explained that the transport sector accounts for more than 20 percent of the ongoing development cooperation portfolio of the Ministry of International Cooperation, with a value of $5.13 billion. The development financing is secured through multilateral and bilateral development partnerships, including the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and Agence Française de Développement (AFD).

The financing is directed towards many projects such as the development of metro lines, the implementation of road projects, and the modernization of railways. Al-Mashat elaborated that the role of the Ministry is not only limited to securing development financing, but also encompasses follow-up on projects to ensure the desired results are achieved. 

The Minister of International Cooperation applauded the support coming through AfDB in providing financing for the development of the railway signals project; which is the first contribution of the AfDB in the transportation sector. The secured funds will enhance the sector’s development efforts by pushing towards Egypt’s development vision and the UN SDGs; SDG 8: Decent Work & Economic Growth, SDG 9: Industry, Innovation & Infrastructure, and SDG 11: Sustainable Cities & Communities.

Al-Wazir expressed that the agreement comes within the framework of the political leadership's directives to develop the existing railway network and a signaling and communication system across various railway lines.

He added that this system also provides the possibility of automatically stopping trains without the intervention of the driver in the event of any danger to prevent human error, while controlling the speed of the train and recording data on its routes.

The development agreement encompasses the installment of the ETCS on old cars; the project covers the provision of 260 wagons, of which 110 were supplied and are eligible for utilizing the management system. The ETCS installment will contribute to less dependence on humans in order to increase the safety and security of railway lines.

Al-Wazir emphasized that the Ministry cooperates with international institutions and multilateral banks to secure development financing that facilitate the implementation of the projects, without burdening the country’s financial status.

He added that the agreement coincides with the Ministry’s implementation of projects that develop and modernize signal systems to increase safety and security of main lines. This is planned to be completed by December 2021 for the Cairo - Alexandria lines and the Benha - Zagazig - Ismailia line. The Port Said line will be 100% completed, the Cairo - Aswan line will be 50 percent completed, and the Beni Suef- Nagaa Hammadi - Aswan will be finished towards the end of December 2021. More work will also be accomplished in the Cairo-Beni Suef- Nagaa Hammadi; as Al-Wazir added that citizens will begin to feel improvement in transportation services by September 2021 alongside the development of the three lines and signal towers.

In 2020, the Ministry of International Cooperation launched a Multi-stakeholder Platform (MSP) for the transport sector, alongside the Ministry of Transportation  Al-Wazir. During the MSP,  Kamel Al-Wazir presented the investment plan for the transportation sector and the development projects that are intended to be implemented in order to achieve cooperation plans with development partners that are aligned with the state’s priorities.

The development agreement focuses on the enhancement of the railway services, contributing to social and economic development through: strengthening the financial sustainability, improving the safety and security of the sector, and advancing the signaling systems to raise customer confidence. The program consists of 3 main phases: 1) design, supply and install automatic train protection systems, 2) implement an environmental and social management plan, and 3) renew and upgrade the railway’s signaling and communication systems.

Malinne Bloomberg, AfDB’s Country Manager in Egypt expressed that the new development financing comes within the framework of AfDB’s strategic partnership with Egypt. Bloomberg added that this will open new horizons for the bank’s work in the transport sector, explaining that they aim to contribute to achieving security and safety, while enhancing the sustainability  of infrastructure, supporting the Ministry of Transportation’s strategy in modernization, and providing 1,200 new jobs in the project’s implementation phase.

The current development cooperation portfolio with the AfDB amounts to $641 million, covering many sectors such as agriculture, transportation, water treatment, scientific research and entrepreneurship. In 2020, the Ministry of International Cooperation secured development financing agreements worth $9.8 billion with multilateral and bilateral development partners, from which $1.79 billion was directed to the transportation sector.