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The African Development Bank (AfDB) yesterday signed a US$500mn loan agreement to support Egypt's Economic Governance and Energy Support Programme Phase II
Approved by the bank's board of executive directors last week, the loan forms part of a three year US$1.5bn package spanning the fiscal years 2015/2016 to 2017/18 (July-June).
At a signing ceremony attended by government and the bank, AfDB executive director Dr. Samy Zaghloul said, "I welcome this strong partnership, which is of critical importance to the government's reform programme and will support Egyptians' standard of living and improve the business environment.
"I'm delighted that the bank is helping to increase our support to help provide job opportunities and improve livelihoods."
Egypt's Minister of International Cooperation Dr. Sahar Nasr added, "This is a vote of confidence for the government's economic programme that will support development projects, which aim at achieving sustainable and inclusive development based on (the) demands of the Egyptian people, focusing on marginalised segments and lagging regions."
Phase one of the fiscal package, a US$500mn loan, was approved in December 2015 and disbursed in January this year.
The Economic Governance and Support Programme has been devised to aid sustainable and inclusive growth and improve efficiency in the country's energy sector.
Among a number of objectives is ensuring sustainable energy supply by improving governance in the power and gas sectors, reforming energy subsidies, rationalising tariffs and enabling private sector investments in cleaner forms of energy.
This will be supported through strenghthening investment and industrial sector regulations, encouraging open competition, transparency and financial inclusion.
Energy sector reforms remain important for the Egyptian government, which moved to liberalise its exchange rate policy last month to stimulate greater capital inflows and increase its foreign exchange reserves.
"The bank's support through this operation will contribute to sustaining the government's reforms agenda, providing further fiscal space to improve the targeting of public action to the most vulnerable segments of the population, and support in Egypt in improving the quality of life and well-being of its citiziens," a statement read.