Egypt Secures Additional $300 Million from World Bank to Mitigate Iran War Impact
The World Bank approves an increased development financing package for Egypt, totaling $800 million, with a British guarantee of $200 million.
Egypt will receive an additional $300 million from the World Bank as part of its broader development financing package designed to help the country manage the economic repercussions of the ongoing Iran war.
Stephane Guimbert, division director for Egypt, Yemen, and Djibouti at the World Bank, made this announcement to reporters on Saturday.
The financial support aims to bolster job creation within the private sector, ensure macroeconomic stability, and facilitate a smooth transition toward green technologies.
The World Bank's board approved the package, which now totals $800 million with a British guarantee of $200 million, on Friday.
The initial allocation for Egypt was $500 million; this amount was increased due to the 'uncertainty in the region and the shock facing Egypt, like other countries, because of the war in Iran,' according to Guimbert.
This financing package is offered on terms that are not available through commercial markets, featuring an interest rate of 6 percent over a 30-year period with a grace period before repayment obligations commence.
The $300 million augmentation stems from the second phase of a three-part program initiated in June 2024; preparations for the third and final component are scheduled to begin next year.
Other financial institutions, such as the Asian Infrastructure Investment Bank, are expected to provide complementary financing concurrently.
Despite private investment's recent rise to approximately 6 percent of GDP from about 4 percent previously, Guimbert noted that this level remains significantly lower compared to peer economies where private investment often exceeds 20 percent of GDP. The World Bank is currently advising Egypt on strategies to enhance foreign direct investment further.
Stephane Guimbert, division director for Egypt, Yemen, and Djibouti at the World Bank, made this announcement to reporters on Saturday.
The financial support aims to bolster job creation within the private sector, ensure macroeconomic stability, and facilitate a smooth transition toward green technologies.
The World Bank's board approved the package, which now totals $800 million with a British guarantee of $200 million, on Friday.
The initial allocation for Egypt was $500 million; this amount was increased due to the 'uncertainty in the region and the shock facing Egypt, like other countries, because of the war in Iran,' according to Guimbert.
This financing package is offered on terms that are not available through commercial markets, featuring an interest rate of 6 percent over a 30-year period with a grace period before repayment obligations commence.
The $300 million augmentation stems from the second phase of a three-part program initiated in June 2024; preparations for the third and final component are scheduled to begin next year.
Other financial institutions, such as the Asian Infrastructure Investment Bank, are expected to provide complementary financing concurrently.
Despite private investment's recent rise to approximately 6 percent of GDP from about 4 percent previously, Guimbert noted that this level remains significantly lower compared to peer economies where private investment often exceeds 20 percent of GDP. The World Bank is currently advising Egypt on strategies to enhance foreign direct investment further.
