A loan worth $400m for the Egyptian government has been finalised on the sidelines of the spring meeting of the World Bank and International Monetary Fund (IMF). The loan, provided by World Bank, will be used to support the Egyptian government’s social safety nets project entitled “Solidarity and Dignity” (Takafol w Karama).
The grant component of the loan is valued at 69.47%.
The signing of the loan agreement came between World Bank Vice President for the Middle East and North Africa Hafez Ghanem and Minister of International Cooperation, Naglaa Al-Ahwani.
The loan is to be repaid over a period of 35 years, with a five-year grace period and a six month US dollar LIBOR interest rate, plus a variable margin.
It was previously announced that the loan would be used to support 1.5 million Egyptian families in poverty.
The project will support the Egyptian government’s new cash transfer programme and will help improve the targeting mechanisms used in the social safety net system, Ghanem had said previously.
He further noted that the World Bank mobilises its international expertise to ensure that the most vulnerable and in need gain access to and benefit from the programme and its offerings.
The families to receive support will be carefully chosen to ensure that resources are delivered to the poorest sectors and those desperately in need.
Egypt’s poverty rate reached 26.3% in the year 2012/13.Also according to a recent report issued by the Central Agency for Public Mobilization and Statistics (CAPMAS), approximately 9.2 million children aged between 0-17 years old are living in poverty.
Aside from the loan, the “Solidarity and Dignity” programme will be supported by local resources, whereby EGP 6bn-EGP 8bn will be provided annually over a period of three years.
A down payment worth EGP 200m has been transferred recently by the Ministry of Finance to support the programme.