The Commercial International Bank – Egypt (CIB) has announced it has signed an agreement to obtain a $100m support loan from CDC Group, the UK’s impact investor and development finance institution.
The support loan will be included in the tier 2 capital base, and the loan term will cover a ten-year period.
In a statement on its website, CIB said the move is in line with executive management plans to strengthen the bank’s capital base. This comes as part of preparations for the expected economic recovery following the novel coronavirus (COVID-19) pandemic.
“The new loan from CDC is in addition to two supporting loans within the tier 2 capital base, each of $100m from the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC),” the bank said.
A statement issued by the British Embassy in Cairo on Thursday said that the financing is to enhance CIB’s capital base, to grow the bank’s business, and expand lending.
The statement added that the financing also aims to increase lending to export sectors in line with the Egyptian government’s agenda of diversifying sources of hard currency away from tourism.
CIB signed a Memorandum of Understanding (MoU)with the CDC Group at the African Investment Summit in London last January.
“This pioneering deal with CIB will enable the bank to support more customers at this critical time,” said Nick O’Donohoe, CEO at CDC Group.
He added: “Supporting capital markets in the banking environment at this time is vital if African economies are to weather the emerging storm of the coronavirus.”
Hussein Abaza, CEO of CIB said, “As a relationship-based organisation, we very much appreciate our partnership with CDC and we are very pleased to see the transaction concluded.”
The British Ambassador to Egypt, Sir Geoffrey Adams, said: “It is great to see the results of the African Investment Summit, which was held in the UK in January, already having such a tangible impact on the ground as this financing facility will provide critical support to small- and medium-sized enterprises (SMEs) in a critical time, which helps to maintain its continuity and protect the workforce in Egypt.”