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Egypt Secures $450Mn In Loans

Cash-strapped Egypt has secured two loans totaling $450mn from the Islamic Development Bank (IDB) and the World Bank to fund a number of projects. The IDB approved a $250mn loan to finance the Helwan power station, following a meeting on 7 August in Cairo between Egypt�s President Muhammad Mursi and IDB President Ahmad Muhammad 'Ali. Egypt is currently facing power outages and any improvement in supply would be welcome by Egyptians.

Details have now become available of a $200mn loan from the World Bank approved at the end of June 2012. The funding is for the Egypt Emergency Labor Intensive Investment Project, which is intended to create a quarter of a million jobs. The project will support employment opportunities for the unemployed, unskilled and semi-skilled workers in those parts of Egypt where the need is most acute. The World Bank said in June that its new short term strategy is to support Egypt while the latter �manages its political transformation, focuses on reforms to increase inclusion, transparency and accountability and on the urgent need to create more and better economic opportunities for all Egyptians.�

Meanwhile Egypt�s newly appointed Minister of Finance Mumtaz al-Sa'id told reporters that Cairo had invited International Monetary Fund (IMF) officials to resume talks about the $3.2bn standby arrangement from the IMF to Egypt that has been under discussion since mid-2011. The IMF has said that it would send its team to Cairo during August to resume negotiations and was �ready to support Egypt and work closely with the authorities,� an IMF spokesman has said. Egypt now has a civilian government, which could provide the necessary broad political support for the loan which the IMF would need (MEES, 6 August). The minister has recently estimated Egypt�s GDP growth at 3.5-4% in fiscal year 2012-13, which began on 1 July.

© Copyright MEES 2012.