Egypt and China have signed a memorandum of understanding (MOU) to pave the way for a debt-for-development swap agreement between the two nations.
The memorandum of understanding (MOU) was signed by Rania A. Al-Mashat, Minister of International Cooperation, and Luo Zhaohui, Chairman of the China International Development Cooperation Agency (CIDCA), as part of the Third Belt and Road Forum (BRF) in Beijing, the Ministry said in a press statement.
The statement said 120 development projects worth $730 million are in various stages of implementation under debt swap programmes in place with Germany since 2011 and with Italy since 2001.
Al-Mashat said that signing an MoU for a debt-swap deal between Egypt and China reflects the strength of the joint relations between the two countries while helping to diversify financing mechanisms.
Debt swaps with Italy and Germany
The 11-year debt-swap agreement with Italy, the third to be signed with the European country, has been extended until December 2024 to complete the projects. The agreement, signed on 10 May 2012, has a total value of $100 million. The projects currently being financed under the agreement include ‘Establishing field silos and an Information Technology System for Wheat Management’ at a cost of EGP 416.7 million; the second phase of ‘Development of Fish Farming in Egypt’ project at a cost of EGP138.9 million, and third phase of the ‘Solid Waste Management in Minya Governorate’ project worth EGP70.5 million.
The debt-swap agreement with Germany, signed during the G8 summit in Deauville in May 2011, supported power, water, sanitation, human capital development and technical education projects.
Germany is also financing projects under the Nexus of Water, Food and Energy (NWFE) programme, launched during COP27 in Sharm El Sheikh last year. In June 2023, Egypt, represented by the Ministry of International Cooperation, Ministry of Electricity and Renewable Energy and the Central Bank of Egypt, signed a €54 million debt swap agreement with the German Development Bank (KfW) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), to finance energy transition projects.
The press statement noted that Egypt and Germany are discussing a new tranche of €50 million to fund energy projects under the programme.
(Writing by Eman Hamed; Editing by Anoop Menon)
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