The European Commission has agreed to provide Egypt with a €1 billion ($1.04 billion) loan to cover part of its 2024/2025 financial needs.
The loan will be released after Cairo fulfils the instructions agreed with the EU as a continuation of macro-financial assistance.
The fund will also support macroeconomic stability and the domestic reform process with continued support from the International Monetary Fund (IMF).
Egypt’s economy, which has been running a significant deficit, began to recover at the beginning of this year after the International Monetary Fund and the European Union announced support.
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The European Commission said in a statement that while the economy is still recovering, it is still affected by Russia’s intervention in Ukraine and the situation in the Middle East. The Committee concluded that Egypt has strengthened its macroeconomic resilience by stabilizing its exchange rate, improving public financial management and expanding comprehensive security services, including first and only loans.
Macrofinancial assistance and the €4 billion second operation currently under negotiation are key components of the EU-Egypt partnership.
Egypt expects to save up to $190 million a year after the International Monetary Fund (IMF) adjusted debt payments, an expert told AGBI in October.
Egypt’s 2023-24 budget is expected to be around 3 trillion Egyptian pounds (about $97 billion), with a large portion of that going to debt repayment, one of the government’s biggest spenders.
In March, Cairo announced it would receive an additional $8 billion loan from the International Monetary Fund after agreeing to implement reforms and policies.
