Egypt is set to receive an $8.1 billion (7.4 billion Euros) funding package from the European Union amidst a humanitarian push by the EU to help Egypt’s ailing economy.
This move is coming weeks after Egypt secured over $40 billion funding deals from UAE and the IMF.
It is noted that the move by the EU is also targeted at upgrading the relationship between EU and Egypt as the economic union seeks to stem migrant flows.
The commitment was announced during a visit by a European Union delegation headed by European Commission President Ursula von der Leyen to Egyptian President Abdel-Fattah El-Sisi in Cairo, Egypt, on Sunday. She noted that the funds would be disbursed through 2027.
It is noted that the EU package consists of €5 billion in concessional loans and €1.8 billion invested in projects focusing on renewable energy and food security. Additionally, there are €600 million in grants, with a third specifically designated for “migration management.”
Ursula von der Leyen noted during the visit, “We share strategic interests in stability and prosperity.”
- She added, “Given your political and economic weight, as well as your strategic location in a very troubled neighbourhood, the importance of our relations will only increase over time.”
Joined by Ursula on the trip were the Italian, Greek, Austrian and Belgian prime ministers, as well as the Cypriot President. Speaking during the visit, Giorgio Meloni, the Italian Prime Minister noted that deals like this were “the best way to address migratory flows.”
- Greek Prime Minister, Kyriakos Mitsotakis, also noted, “The stability and prosperity of Egypt is of critical importance to the European Union.”
It is noted that most of the EU funding is newly designated and was formulated in close collaboration with the IMF. Of the concessional loans, €1 billion is slated for delivery this year. However, it is noted that remaining €4 billion is subject to approval from the EU parliament.
What you should know
This year, the Egypt government has been able to secure over $40 billion funding packages from the UAE and the IMF.
In February, the Egyptian government announced it had agreed with the United Arab Emirates to develop a significant area along its Mediterranean coastline. The deal is expected to bring $35 billion in investments to Egypt within the next two months.
Then in March, the country also secured an $8 billion deal with IMF, as well as a $1.2 billion loan for environmental sustainability from the IMF, taking its total funding from the IMF above $9 billion.
According to Bloomberg, Egypt teetered on the edge of economic collapse until it unveiled the $35 billion investment from the United Arab Emirates.
This development was augmented by the $8 billion from the IMF, and this facilitated the long-anticipated devaluation of the Egyptian currency.
