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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

MOIC's 2023 Annual Report Reveals $10.3 Bln Development Financing for Private Sector


Sun 17 Dec 2023 | 08:11 PM
Israa Farhan

The annual report of the Ministry of International Cooperation for 2023, entitled “International Partnerships for Sustainable Development: Platforms for Policy and Practice,” revealed that the total development financing for the private sector from multilateral and bilateral development partners amounted to $10.3 billion during the period from 2020 to 2023.

The annual report of the Ministry of International Cooperation explained that there are many sectors that the private sector has supported through international companies over the past years, including health, agriculture, industry, transportation, education, infrastructure, construction, technology, micro, small and medium enterprises, and finance markets and energy, pointing out that the most prominent areas of the private sector that benefit from development financing are the manufacturing industries, the finance sector, the service sectors, and infrastructure.

According to the report, the efforts of international partnerships are reflected in the empowerment of the private sector, through many mechanisms, directly and indirectly, and among the direct mechanisms are financing major national projects, investing in capital, facilitating foreign trade, advisory and technical services, capacity building, and investment guarantees. 

In addition to indirect mechanisms, including technical and advisory support to enhance the business environment necessary to empower the private sector, financing development projects in partnership with the private sector, and credit lines.

Over the years 2020, 2021, 2022, and 2023, the European Investment Bank (EIB) topped the development partners in terms of financing available to the private sector, with a value of $2.8 billion, followed by the European Bank for Reconstruction and Development (EBRD), with financing worth $2.12 billion, followed by financing from the International Finance Corporation (IFC) amounted to about $1.66 billion, and the OPEC Fund for International Development provided development financing worth $1.27 billion.

During that period, the Japan Bank for International Cooperation provided financing to the private sector worth $521 million, the British CDC provided financing worth $420 million, the French Development Agency provided $331 million, the Japanese International Cooperation Authority and Sumitomo Bank provided around $200 million, the Japanese International Cooperation Authority provided $188 million, the Asian Infrastructure Investment Bank’s financing for the private sector amounted to about $150 million, and the Netherlands Development Bank provided $115 million.

Financing from the Multilateral Investment Guarantee Agency and the Abu Dhabi Export Office amounted to $100 million each, while the African Development Bank provided $51.5 million, the World Bank Group and the Arab Fund for Economic and Social Development provided $50 million each, and the African Export-Import Bank provided about $44 million. $, and the Islamic Corporation for the Development of the Private Sector $30 million.

The combined financing from the Saudi Fund for Development, the Green Climate Fund, the European Union, the German Construction Bank, and Switzerland amounted to about $78 million.

The most prominent partnerships implemented during the current year

This year witnessed the launch of the second phase of the technical support and digital transformation program for the Suez Canal Economic Zone, which is being implemented in light of the partnership with the European Bank for Reconstruction and Development, and the implementation of the country strategy, which enhances efforts to stimulate the private sector, green transformation, and support comprehensive and sustainable growth. 

This is after the first phase achieved significant progress in accelerating the pace of procedures for investors in the Suez Canal Economic Zone, which enhances the efficiency of the services provided and supports the state’s priorities to transform the region into a major development hub and enhance the competitive advantages available to investors from all over the world.

The second phase aims to simplify administrative procedures, accelerate the management of investor services, launch a unified and automated window that provides services to investors, and develop an effective, competitive, and environmentally friendly business environment.

The third edition of the African Intra-Trade Exhibition

During the activities of the third edition of the African Intra-Trade Exhibition, which was held in Cairo, the Minister of International Cooperation, Rania Al-Mashat, and the President of the African Export-Import Bank (Afreximbank) launched the electronic platform for engineering, procurement, and construction (EPC) contracts, which aims to address the financing gap by enhancing international cooperation, attracting investments in the field of infrastructure, bridging the information gap, enhancing transparent communication between governments, the private sector, and international development partners, and addressing the skills gap, by providing technical support, capacity building, and skills development to build a skilled workforce.

Partnerships with the International Finance Corporation

The relationship between the Egyptian government and the IFC is part of the broader relationship with the World Bank Group (WBG), one of the largest multilateral development partners that the Arab Republic of Egypt deals with to support and stimulate sustainable development efforts.

It is part of the WBG, and the total cumulative investments of the International Finance Corporation in Egypt record $7 billion investments since the beginning of work in Egypt, in addition to an advisory and technical support portfolio worth $34 million. These investments are distributed across many sectors, including green finance, financial technology, healthcare, pharmaceutical companies, agribusiness, sustainable manufacturing, and entrepreneurship support.

Consulting services agreement for government proposals

During the current year, H.E. Dr. Mostafa Madbouly, Prime Minister of Egypt, signed the advisory services agreement, according to which the IFC was appointed as a strategic advisor to the government proposals program, and it was signed by Al-Mashat, and Makhtar Diop, Director General of the IFC. According to the agreement, the IFC will provide support and technical advice to the government IPO program, help in structuring and preparing companies targeted to be offered to the private sector, and improve corporate governance, in a way that enhances capital flows and supports the country’s vision for achieving economic recovery.

The IFC plays a role in supporting the government proposals program, through consultations, technical support, and developing an integrated plan to implement the program in a way that accelerates its pace and achieves precisely defined goals.

Partnership agreements with the private sector

To strengthen the existing and fruitful relations between the Arab Republic of Egypt and the IFC, the arm of the WBG for financing the private sector, Al-Mashat witnessed the signing of 3 agreements between the IFC and the private sector in Egypt in the areas of climate action, financing medium-sized companies, and seawater desalination, during Visit of IFC Regional Vice President for Africa, Sergio Pimienta, to Egypt.

These agreements focus on expanding climate action initiatives, financing medium-sized companies, and establishing four desalination plants, in line with the IFC’s target of $2 billion in private sector investments within the 2023-2027 CPF.

A partnership was signed between the IFC, the EBRD, and the Sovereign Fund of Egypt, to support the partnership between the government and private sectors and provide technical support and consultations to develop 4 seawater desalination plants, providing 335 thousand cubic meters of clean water daily, which will increase in the future to 650 thousand cubic meters in Matrouh Governorate and the North Coast region, in light of government efforts aimed at providing clean water and implementing the 2030 SDGs.

Two partnerships were also signed between the Foundation, the Commercial International Bank (CIB), and Mediterranea Capital, to enhance cooperation in the field of supporting medium-sized companies and climate action.