EBRD, EU expand access to finance for Egyptian private sector

ArabFinance: The European Bank for Reconstruction and Development (EBRD), the European Union (EU) and the Green Climate Fund (GCF) are boosting green finance and the development of value chains for the Egyptian private sector with a financing package of $82 million to Ahli United Bank in Egypt (AUBE), according to a statement by the EBRD.

The package consists of a $30 million credit line for on-lending to small and medium-sized enterprises (SMEs), a $10 million value chain loan under the EU-funded Trade and Competitiveness Program, and a $12 million green value chain loan supported by the GCF and the EU, as well as a $30 million trade facility under the EBRD Trade Facilitation Program (TFP).

The SME credit line will help increase access to finance for small businesses that remain underserved despite their crucial role in the Egyptian economy.

The loan will also allow AUBE to extend its support to SMEs located in remote regions outside Greater Cairo and Alexandria.

The value chain and green value chain loans will support SMEs in agribusiness, manufacturing and services, logistics, and information and communication technologies in efforts to enhance their competitiveness, the statement said.

The program will allow small businesses to invest in advanced technologies and in climate mitigation and adaptation solutions that enhance the development of green value chains. The program also supports equal opportunities for men and women.

The trade facility will be used to issue guarantees in favour of confirming banks to support trade finance instruments issued by AUBE and provide cash advances to fund trade-related loans for pre-export and post-import financing and local distribution of imported goods, according to the banks statement.

It is worth noting that AUBE is 95.7% owned by Ahli United Bank, the largest bank in Bahrain.

Egypt is a founding member of the EBRD. Since the start of its operations in Egypt in 2012, the EBRD has invested more than EUR 8 billion in 138 projects in the country. The EBRDs areas of investment include the financial sector, agribusiness, and manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services, and contributions to the upgrade of transport services.