World Bank Announces $700 Mln Development Financing for Egypt

The World Bank (WB) has announced $700 million in Development Policy Financing (DPF) for Egypt to support the country’s shift towards more private sector participation, better macroeconomic and fiscal resilience, and a greener growth trajectory, the WB said in a statement on Monday.

The financing comes under the Generating Resilience, Opportunities, and Welfare for a Thriving Egypt (GROWTH) programme that is designed to help Egypt address its short-term economic challenges while advancing the next generation of structural reforms to level the playing field to unleash private sector growth and build macroeconomic and fiscal resilience.

It also aims to facilitate Egypt’s green transition, including scaling up renewable energy and uplifting the electricity, water, and sanitation efficiency.

$200 million out of the $700 million is contingent on complementary financing from development partners.

This DPF is part of the World Bank Group’s intended three-year $6 billion programme of support for Egypt announced in March 2024 to help spur private sector growth and job creation, enhance human capital outcomes, foster climate resilience, and strengthen economic management amid the ongoing geopolitical tensions in the region.

“The Government of Egypt is undertaking ambitious economic and structural reforms to create a more competitive, green, and private sector-led economy.

Through this budget support instrument, the DPF with the World Bank helps advance policy reforms on three top national priorities: building macro-fiscal resilience, enhancing economic competitiveness and improving the business environment, and supporting the green transition.

Our longstanding partnership with the World Bank underpins the realization of Egypt’s development and reform efforts,” said Minister of International Cooperation and Governor of Egypt to the World Bank Rania Al-Mashat.

The DPF is the first in a programmatic series of three operations aiming to help advance key reforms, including strengthening the governance framework for state-owned enterprises through the creation of a legal basis for the country’s State Ownership Policy; empowering the Egyptian Competition Authority in combatting non-competitive mergers and acquisitions; enhancing domestic revenue mobilization by ensuring the accurate assessment of payroll taxes; reducing electricity distribution system losses; improving capacity for climate adaptation and the financial sustainability of the water and sanitation sectors; scaling up renewable energy; and establishment of a voluntary carbon credit market regulatory framework.

“Creating good, sustainable jobs and building resilience to climate change is critical for the current and future prosperity of Egypt’s citizens – especially the poor and vulnerable.

Reforms supported by this operation are an important step towards a more sustainable, inclusive economy,” World Bank Country Director for Egypt, Yemen, and Djibouti Stephane Guimbert stated.

The new DPF is aligned with the World Bank’s Egypt Country Partnership Framework for FY2023-FY2027, which prioritizes private sector development and is informed by recent World Bank Group's analytical work on Egypt, including the Country Private Sector Diagnostic and the Country Climate and Development Report.

It also aligns with Egypt’s development priorities and national strategies, including the Sustainable Development Strategy Vision 2030, the State Ownership Policy, the National Climate Change Strategy 2050, and the Nexus of Water, Food, and Energy.