Egypt has set a cap on its external borrowing at between 40% and 45% of gross domestic product (GDP), as part of the second edition of the ‘Narrative for Comprehensive Development.

The External Debt Management and Borrowing Regulation Committee affirmed that this cap shall not be exceeded except in cases of extreme necessity and with the approval of the Cabinet.

Meanwhile, the committee's guidelines include rationalizing external borrowing, improving the governance of the borrowing system, and prioritizing loans related to basic needs, such as fuel, food, and medicine.

It aims to support the budget and bridge the financing gap by reprioritizing projects based on thorough economic feasibility studies.

The guidelines intend to improve borrowing terms and modernize cooperation frameworks with development partners. This includes favoring loans with concessional financing terms, securing appropriate grace periods that extend beyond the project implementation timeframe.

Furthermore, it includes restructuring external debt through debt-for-investment swaps similar to the Ras El Hekma deal in 2024.

Egypt also inked swap deals with a number of countries, including Germany at a value of EUR 340 million, and Italy with a value of $350 million, which was used to finance 86 projects in various fields.

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