CAIRO - 19 October 2023: Egypt is the first country to sign a debt swap agreement for development with China International Development Cooperation Agency, according to the Minister of International Cooperation, Rania Al-Mashat.
Al-Mashat stated that the signing of a memorandum of understanding in the field of debt swap between the Ministry of International Cooperation and China International Development Cooperation Agency reflects the strength of the bilateral relations between the two countries, bound by historical ties of friendship that date back to ancient history.
The minister elaborated that Egypt has accumulated expertise and outstanding experience in debt swaps since the early 2000s with both Germany and Italy, while Egypt is the first country to sign a debt swap agreement with China International Development Cooperation Agency, aiming to diversify financing mechanisms through innovative instruments.
The Ministry of International Cooperation (MOIC) in Egypt has already successfully implemented debt swap programs for development with Germany and Italy since 2001. These programs, valued at approximately $730 million, have facilitated the realization of numerous projects across various sectors of development. To date, a total of 120 projects have been implemented, with others currently underway.
In addition to the debt swap agreement, trade relations between Egypt and China have witnessed significant growth. According to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS), trade exchange between the two countries surged by 2.2 percent in 2022, amounting to $16.2 billion compared to $15.9 billion in 2021.
Furthermore, Egypt's exports to China experienced a remarkable increase of 25.1 percent, reaching $1.8 billion in 2022 as opposed to $1.5 billion in 2021. This underscores the expanding economic ties between the two nations and highlights the potential for further collaboration in the future.
During his visit to China to participate in the Belt and Road Forum, Mostafa Madbouly, the Prime Minister, witnessed the signing of a memorandum of understanding in the field of debt swap for development between Rania Al-Mashat, the Minister of International Cooperation, and Mr. Luo Zhao Hui, the chairman of China International Development Cooperation Agency.
According to the International Cooperation Ministry, the signing of the memorandum comes within the context of both sides' desire to explore new horizons and areas of cooperation, aiming to enhance the comprehensive strategic partnership. Furthermore, the signing of the memorandum on debt swap for development reflects the commitment of both parties to strengthen cooperative bonds built upon the principle of Win-Win cooperation, while the economic ties between the two nations serve as a robust model for South-South cooperation.
The Minister of International Cooperation further emphasized that this memorandum of understanding represents a pioneering initiative by China International Development Cooperation Agency with a partner country, highlighting the depth of the ties between the two countries. It underscores the continuous evolution of the bilateral relations since the signing of the Comprehensive Strategic Partnership agreement in 2014 by the leaders of both nations, during President Abdel Fattah El-Sisi's visit to Beijing.
Al-Mashat also mentioned that the government adheres to the principles of governance and precise management of debt swap programs within the framework of international cooperation and development financing, aiming to maximize the benefits of these programs.
The debt swap program with China International Development Cooperation Agency reflects the government's efforts to diversify the financing structure and enhance developmental and climate actions through collaboration with bilateral development partners, according to the minister.
The debt swap mechanism is a tool for enhancing available financing for implementing developmental projects by signing agreements through which a portion of the debts owed by development partners is being swapped to implement projects.
This is done with the aim of alleviating the burden of external debt, achieving sustainable development by financing priority projects, and supporting efforts to achieve the seventeenth goal of the Sustainable Development Goals, which is "Partnerships for the Goals." Based on this mechanism, the local currency equivalent of the debt is utilized to finance mutually agreed-upon development projects.
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