WASHINGTON, June 24, 2024 ¨C ÐÓ°ÉÂÛ̳ has announced US$700 million in Development Policy Financing (DPF) for the Government of Egypt to support the country to shift toward more private sector participation, better macroeconomic and fiscal resilience, and a greener growth trajectory.
The ¡°¡± DPF is designed to help Egypt address short-term economic challenges while advancing the next generation of structural reforms to level the playing field to unleash private sector growth; build macroeconomic and fiscal resilience; and facilitate Egypt¡¯s green transition, including by scaling up renewable energy and increasing efficiency in the electricity, water and sanitation sectors.
Minister of International Cooperation and Governor of Egypt at the ÐÓ°ÉÂÛ̳ H.E. Dr. Rania A. Al-Mashat said: ¡°The Government of Egypt is undertaking ambitious economic and structural reforms aimed at creating a more competitive, green and private sector-led economy. Through this budget support instrument, the DPF with the ÐÓ°ÉÂÛ̳ helps advance policy reforms on three of its 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 ÐÓ°ÉÂÛ̳ underpins the realization of Egypt¡¯s development and reform efforts.¡±
The DPF is the first in a programmatic series of three operations. It will help advance key reforms, including: strengthening the governance framework for state-owned enterprises through the creation of a legal basis for the State Ownership Policy; empowerment of 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.
The newly approved DPF is part of the ÐÓ°ÉÂÛ̳ Group¡¯s intended 3-year $6 billion program 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.
¡°Creating good, sustainable jobs and building resilience to climate change are critical for the current and future prosperity of Egypt¡¯s citizens ¨C especially the poor and vulnerable,¡± said Stephane Guimbert, ÐÓ°ÉÂÛ̳ Country Director for Egypt, Yemen & Djibouti. ¡°Reforms supported by this operation are an important step towards a more sustainable, inclusive economy.¡±
The new DPF is aligned with the ÐÓ°ÉÂÛ̳¡¯s Egypt Country Partnership Framework for FY2023-FY2027, which prioritizes private sector development, and is informed by recent ÐÓ°ÉÂÛ̳ Group analytical work on Egypt, including the and the Country Climate and Development Report. Of the $700 million in the current DPF, $200 million is contingent on complementary financing from development partners.
The DPF 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.
