Egypt, Italy sign mutual letters to extend 3rd tranche of debt swap program for development

CAIRO - 15 May 2023: Egypt’s Minister of International Cooperation, Rania Al-Mashat, and Ambassador of Italy to Egypt, Michele Quaroni, signed Monday, mutual letters to extend the third tranche of the debt swap program for development until December 2024.

 

Quaroni exchanged letters to extend the agreement for the third phase of the debt swap program for development until December 2024 to ensure the optimal completion of all projects implemented within its framework.

 

The International Cooperation Ministry elaborated in a statement that the debt swap program for development between Egypt and Italy is a unique model for development cooperation at the bilateral level, in which two successful phases were implemented where many projects were implemented in various priority sectors. 

 

It added that a number of development projects are being implemented in various fields such as the environment, agriculture, nutrition, education, cultural heritage and civil society to contribute significantly to achieving the SDGs.

 

This includes projects, in the food security sector: the "Establishment of Field Silos and Information Technology System for Wheat Management" project, at a value of LE 416.7 million, and the second phase of the "Development of Fish Farming in Egypt" project, at a value of LE 138.9 million, and in the environmental sector, as well as financing the third phase of the "Solid Waste Management in Minya Governorate" project, at a value of LE 70.5 million.

 

Al-Mashat highlighted the government's appreciation for the joint relations with the Italian side, and the importance of the debt swap program for development, which achieves many goals simultaneously, the most important of which is reducing external indebtedness, and increasing development cooperation projects implemented between the two sides, pointing out that this program -that is being implemented with the Italian side- is a model that many countries and development partners seek to emulate.

 

The bilateral cooperation relations between Egypt and Italy began after the signing of an economic cooperation protocol between the two countries in 1975. The fields of cooperation vary in various fields, including infrastructure, health care, the environment, and small and medium industries. Egyptian-Italian cooperation is divided into bilateral cooperation, the Egyptian-Italian debt swap program, as well as the commodity import program.

 

The debt swap mechanism is a means to enhance the financing available for development projects through the signing of agreements under which part of the debt owed to development partner countries is exchanged, with the aim of alleviating the burden of external debt and achieving sustainable development through financing priority projects. 

 

The first phase of the Egyptian debt swap program was signed with the Italian Fund for Development in 2001 and amounted to $149.09 million, where the local equivalent of the entire amount was used to finance 54 projects in the governorates of Egypt in many sectors.

 

The second agreement was signed in 2007 and amounted to $100 million. Through this agreement, 32 projects in various development sectors were financed to decrease poverty and create new jobs at low costs through the solid waste management system, and to establish a wastewater treatment plant in the city of Rubiki. 

 

The third phase of the debt initiative project was signed in 2012, at a value of $100 million. 

 

The local equivalent of these funds is used to finance projects agreed upon within the framework of the state plan in the areas of food security, education and higher education, agriculture, civil society, the environment and the preservation of cultural heritage.