Egypt’s Ministry of International Co-operation’s 2021 Annual Report titled “Engaging For Impact Towards Our Common Future: International Partnerships for Sustainable Development” detailed the development financing secured from bilateral and multilateral development partners, and International Financial Institutions (IFIs) in 2021.
The total development financing in 2020 and 2021 amounts to $20 billion, of which $9.8 billion was secured in 2020 and $10.2 billion in 2021, including $8.7 billion directed to public sector development and $1.57 billion directed to private sector development, according to a press release published by the ministry on Monday.
This also includes development financing grants of $476 million, representing 5 per cent of 2021’s total secured development financing.
This is within the framework of the Ministry of International Co-operation’s country-led multi-stakeholder engagement framework aimed to strengthen economic relations between Egypt and its bilateral and multilateral development partners, and regional and international organisations, pushing forward Egypt’s Vision 2030, which also aligns with the United Nations 2030 Sustainable Development Goals (SDGs).
In 2021, the ministry secured development financing agreements for various sectors to infrastructure across sectors of housing, water, irrigation, and sanitation services, transportation, electricity, renewable energy, agriculture, food security, and the environment.
The development financing agreements directed to the public sector development amounts to $8.7 billion.
Supporting Egypt’s Vision to Develop the Infrastructure
The ministry’s annual report states that the development financing obtained from bilateral and multilateral development partners, directed to the infrastructure across various sectors, amounts to $2.95 billion, through which $1.14 billion were allocated to five projects in the transportation sector, which is one of the high-priority sectors for development in Egypt’s plan to achieve sustainable development.
The development financing, made available by development partners, such as Austria, the European Bank for Reconstruction and Development, the African Development Bank, and the World Bank Group, contributes to the achievement of SDG 9: Industry, Innovation and Infrastructure and SDG 11: Sustainable Cities and Communities.
The year 2021 has also witnessed development financing agreements to the housing and utilities and local development sector, worth $169 million, from development partners including the Kuwait Fund For Arab Economic Development (KFAED), the African Development Bank (AfDB), and the European Union (EU), to achieve the UN’s SDGs, namely SDG 6: Clean Water and Sanitation; SDG 9: Industry, Innovation and Infrastructure, and SDG 11: Sustainable Cities and Communities.
Advancing Egypt’s strategy to advance the green transformation towards new and renewable energy, and working towards the achievement of the 2035 Integrated Sustainable Energy Strategy (ISES), in 2021, $1.04 billion was secured in development financing directed to sectors of energy, renewable energy, and petroleum, from development partners including the International Islamic Trade Finance Corporation (ITFC), the EBRD, and Germany; advancing towards SDG 7: Affordable and Clean Energy; SDG 12: Responsible Consumption and Production; and SDG 13: Climate Action.
The annual report has also shown that the ministry secured $230 million in the environment sector this year, from development partners, including the World Bank Group, the European Union, Agence Française de Développement, and Germany.
This development financing contributes to SDG 7: Affordable and Clean Energy, SDG 9: Industry, Innovation, and Infrastructure, SDG 11: Sustainable Cities and Communities, SDG 12: Responsible Consumption and Production, and SDG 13: Climate Action.
This is in addition to signing 2 development financing agreements with Japan and the AfDB, allocated to the development of the electricity, worth $330 million, $238 million of which were from Japan, and $92 million from the AfDB.
This supports progress towards SDG 1: No Poverty, SDG 10: Reduced Inequalities, SDG 16: Peace, Justice, and Strong Institutions, and SDG 17: Partnerships for the Goals.
Development Financing Secured to the Investment in Human Capital
The development financing secured through partnerships with multilateral and bilateral development partners in 2021, and in support of investing in human capital, amounts to $2.47 billion, covering various sectors including health, education, higher education, gender equality, small and medium enterprises (SMEs), and food security.
In the past year, the World Bank Group (WBG) provided development financing worth $400 million, alongside development financing secured from the Agence Française de Développement (AFD) worth $182 million for the budget support sector in a way that enhances the implementation of the Universal Health Insurance System (UHIS), providing insurance coverage and developing health care services.
This is alongside a $20 million grant from the USA and the European Union dedicated to the health sector.
In the agriculture, supply, and irrigation sector, $1.5 billion in development financing was secured through cooperation with the International Islamic Trade Finance Corporation (ITFC), the European Bank for Reconstruction and Development (EBRD), the International Fund for Agricultural Development (IFAD), and the European Union.
This supports the achievement of SDG 2: Zero Hunger, SDG 6: Clean Water and Sanitation, SDG 8: Decent Work and Economic Growth, SDG 9: Industry, Innovation, and Infrastructure, SDG 12: Responsible Consumption and Production. Developments in this sector are directed at achieving food security, and by expanding silo projects and promoting sustainable transport.
In terms of education and higher education, $134 million was secured through cooperation with the AFD, Germany, USA, and Japan, supporting the implementation of SDG 4: Quality Education, SDG 5: Gender Equality, SDG 8: Decent Work and Economic Growth, SDG 9: Industry, Innovation and Infrastructure, and SDG 10: Reduced Inequalities.
In the same context, $57 million was secured through cooperation with Germany and the Arab Fund for Economic and Social Development (AFESD) for MSMEs.
Moreover, $26 million was secured for gender and social protection dedicated to supporting female entrepreneurs, supporting women’s health, and promoting equal opportunities. In 2021, the Ministry of International Cooperation launched the “Closing the Gender Gap Accelerator” with the World Economic Forum (WEF), the National Council for Women (NCW), and the private sector.
Moreover, development financing worth $22 million was secured through cooperation with the European Union and Germany for trade and industry; and $86 million was secured through cooperation with the AFD, European Union, USA, and Germany.
Development Policy Financing
In 2021, a $720 million Development Partnerships Finance Framework was signed with the World Bank and the Asian Infrastructure Investment Bank, as well as $360 million from each bank in support of Egypt’s structural reforms, to foster inclusive growth.
There are three main principles enclosed in this agreement; enhancing macro-fiscal sustainability, enabling private sector development, fostering women’s economic inclusion.
The first pillar aims to enhance the overall financial sustainability, building on the success of the Government of Egypt’s first wave of reforms. It encompasses improving the management of state-owned enterprises through bolstering efficiency and reporting and stimulating the transition towards a green economy.
Under the first pillar, there is a focus on SOE Governance and Transparency, Debt Management, and Green Finance, paving the way for an increase in the number of green-tagged public investment projects.
The second pillar aims to enhance the private sector’s engagement in development efforts through supporting digital and financial inclusion; enhancing trade facilitation; and customs-related processes, to boost Egypt’s competitiveness and private-sector job creation.
This is in addition to enhancing the private sector’s engagement in waste management, which lays the foundation for a green and inclusive development. In more detail, the second pillar delves into financial inclusion enhancing the financial sector’s development through fintech licenses, and business restructuring.
In that same vein, the third pillar further supports the economic inclusion of women, and the government legislative and regulatory reforms that promote female participation in the labor force. This includes supporting the government in promoting safe and decent transportation for women in railways.
The third pillar is centered around female labor force participation, gender-based violence, and female access to finance; opening the door to increasing the percentage of female workers employed across industries, and readdressing mechanisms for reporting violations.
Framework Agreements with France, Spain, and China
The Egyptian government also signed framework agreements worth $2.6 billion with bilateral development partners; France, the AFD, Spain, and China, to implement several development projects in support of the 2030 vision and the SDGs. The agreed-upon projects will be finalized in the coming period.
Development Financing Secured to the Private Sector
In 2021, the private sector received development financing with a total of $1.56 billion through direct financing and lines to commercial banks for the financing of SMEs.
This is in addition to the issuance of the first green bonds in Egypt, as well as the European Bank for Reconstruction and Development’s (EBRD) financing to the country’s renewable energy flagship project, the Benban Solar Power complex.
The ministry’s annual report showed that the International Financial Institution (IFI) provided development financing; including $527 million from the EBRD; $420 million from the United Kingdom’s CDC; $248 million from the International Finance Corporation (IFC); and $100 million from the Japan International Cooperation Agency (JICA).
Furthermore, the Asian Infrastructure Investment Bank has provided development financing worth $150 million; this is in addition to the $68 million development financing provided from the OPEC Fund for International Development.
The African Development Bank has also provided $18 million development financing; the Green Climate Fund has provided development financing $24 million; the Saudi Fund for Development has provided $12 million and Switzerland has provided development financing $2 million.
