March 19, 2024 (EIRNS)—The World Bank Group announced yesterday a $6 billion financing agreement with Egypt extending over the next three years. The program goes hand in hand with the recently-signed loan agreement, an Extended Fund Facility (EFF), with the International Monetary Fund, for $3-$8 billion over four years. The World Bank loan, in part, is aimed at implementing certain of the conditionalities of that agreement, including privatization of state assets.
The World Bank program calls for $3 billion for governmental programs and another $3 billion for the private sector, pending approval. Funds would be used to support the privatization of government assets through the government’s Asset Monetization Program. The funds are also said to provide guarantees that support ‘'impactful private sector investments,'’ which also refers to Green projects that ‘'address climate change.''
The World Bank is discussing with Egypt the creation of a Development Policy Financing (DPF) program aimed at ‘'enhancing economic competitiveness and improving the business environment, building macroeconomic resilience, and supporting the green transition.” In line with the IMF privatization conditionality, this DPF is aimed at implementing the ‘'State Ownership Policy and reforms aimed at fostering private sector growth.”
The World Bank’s current portfolio in Egypt exceeds $8 billion, with funds allocated from the International Bank for Reconstruction and Development, the International Finance Corporation, and the Multilateral Investment Guarantee Agency.
Both the World Bank and IMF are attempting to take advantage of Egypt, whose financial situation has worsened during Israel’s war on Gaza, as traffic through the Suez Canal has decreased. Egypt’s foreign debt has now risen to above $164 billion, and its currency, the Egyptian pound, has been under attack. However, beneath the financial crisis, it is of note that Egypt has one of the most ambitious physical-economic programs in the world, including city-building.
It is building, since 2015, its “New Administrative Capital” near Cairo, along with five other cities. This year, it announced that 15 new future cities will be constructed. In 2018, it launched a project to build three high-speed rail lines with a total length of about 2,000 km. The first line links the cities of Ain Soukhna on the coast of the Red Sea to the new city of Alamein. It is complemented by constructing a nuclear power plant that will have 4.8 GW of installed capacity at El Dabaa, and so forth.