CAIRO, December 19, 2015 – Egypt and the World Bank signed today US$1 billion in a development policy finance operation for Egypt to support the Government’s economic reforms program across key economic areas.
Two days earlier, the World Bank Group’s Board of Executive Directors approved the First Fiscal Consolidation, Sustainable Energy, and Competitiveness Programmatic Development Policy Financing (DPF). This is the first in a programmatic series of three annual development finance loans to Egypt.
“This operation supports key economic policies essential for building capacity of domestic institutions, promoting investments and creating jobs in Egypt” said Asad Alam, World Bank Country Director for Egypt, Yemen and Djibouti. “This program is central to our new Country Partnership Framework that scales up World Bank Group support to Egypt to about US$ 8 billion over 2015-19” he added.
The programmatic approach would support reform implementation, over three years in order to achieve sustainable reform outcomes, The second and third DPFs would be prepared sequentially subject to implementation of the multi-year reform program, particularly with respect to an adequate macroeconomic framework. The DPF program is based on collaboration with development partners, especially the African Development Bank which is providing parallel financing.
The program was coordinated by an inter-ministerial working group comprising 6 ministries of the Government led by Ministry of International Cooperation, reflecting close collaboration and team work within different Government departments. The program focuses on three pillars – fiscal consolidation through rationalization of tax regimes, moderation of the wages, and stronger debt management; ensuring sustainable energy supply through reforming energy subsidies, promoting clean energy, and liberalizing the energy market to allow for greater private sector engagement; and enhancing the business environment through a package of reforms designed to cut red tape, reduce barriers to entry, and promote better competition policies.
“The policies supported by program would help unlock the private sector investment in key sectors, that are integral for job creation,” said Ashish Khanna and Ahmed Kouchouk, co Task Leaders of the program from World Bank “Among other things, the DPF program seeks to unlock Egypt’s energy supply potential by reforms to attract investments into t the gas and electricity sectors, support the regular publishing of public debt management strategy, and enhance competition and enabling environment for businesses,” they added.
The current portfolio of the World Bank in Egypt includes 28 projects for a total commitment of US$6.47 billion. The World Bank finances projects for faster delivery of benefits to the people of Egypt in key sectors including social safety nets, energy, transport, water and sanitation, agriculture and irrigation, housing, health, as well as supporting employment-intensive projects and financing for Micro and Small Enterprises.
