The European Bank for Reconstruction and Development (EBRD) agreed, on Wednesday, to extend its trade finance to Egypt’s Banque Misr by $100m as part of the former’s Trade Facilitation Program (TFP).
The $100m finance has been allocated to support emerging market economies during the ongoing repercussions of the novel coronavirus (COVID-19) pandemic, according to Egypt’s Minister of International Cooperation Rania Al-Mashat.
The EBRD said that the increase has been approved in order to help meet the increased demand for import and export transactions in Egypt.
On Tuesday, the European bank provided another $100m loan to enable Banque Misr to provide short-term financing to private small- and medium-sized enterprises (SMEs) and corporates. The financing is to help these businesses face liquidity strains due to a decrease in their activities and turnover caused by the global pandemic.
The EBRD is also providing support to Egypt’s real economy through a $200m financing package, which was granted to Banque Misr. The separate financing package is to be used for trade and for on-lending to SMEs and private businesses, a key segment of the local economy, impacted by the pandemic.
The $200m financing package falls under the EBRD’s coronavirus Solidarity Package, established to meet immediate short-term financing needs to support private businesses through existing EBRD partner banks.
The EBRD expects to dedicate the entirety of its activities to combating the economic impacts of the crisis, and stands ready to provide €21bn in support over the 2020-2021 period. The finance is designed to help the 38 emerging economies where the bank invests overcome the economic slowdown.
This financing package is line with the Ministry of International Cooperation’s Global Partnerships Narrative that focuses on three pillars: ‘People at the Core’, ‘Projects in Action’, and ‘Purpose as the Driver’, according to Minister Al-Mashat.
The minister also pointed to the importance of the partnership with the EBRD in supporting development Egypt’s efforts at the governmental and private levels, by providing funding for priority projects.
She noted that this comes as part of the joint coordination cooperation platform between the bilateral multilateral development partners, launched by the ministry in April. It aims to strengthen the frameworks for dialogue and cooperation between the government and development partners.
The ministry has held several workshops with the participation of the relevant Egyptian ministries and officials at international institutions. The workshops highlighted the development efforts in various sectors, and have defined the financing priorities during the coming period.
Egypt is a founding member of the EBRD. Since the start of its operations in 2012, the EBRD has invested close to €7bn in 120 projects in the country.