CAIRO: Egypt’s government is considering a plan to get a $1 billion loan from the African Development Bank (AFDB) in 2015, a month after media reports said the bank was in negotiations with the World Bank to swap $1 billion in debts owed to the AFDB by Egypt.
According to the new plan, the loan will be allocated to finance infrastructure projects, develop small and micro enterprises (SMEs) and embark on a joint venture with public–private partnerships (PPP), anonymous sources told Al-Mal newspaper Monday.
On May 26, another source told the newspaper that the AFDB seeks to get liquidity from the World Bank through swapping Egypt’s debts.
The AFDB has not provided Egypt loans since the January 25 Revolution due to the downgrades in Egypt’s credit rating.
Egypt’s sovereign credit rating was downgraded to B- in July 2013 by Fitch Ratings over political fluctuation. However, Fitch upgraded the outlook on Egypt’s long-term rating to stable in January.
On April 23, the AFDP approved an “unfunded $ 50 million risk participation agreement (RPA) with Egypt’s Commercial International Bank (CIB) to support trade transactions originating from issuing banks in Africa,” the AFDP said in a statement on its official website.
According to the AFDP economic outlook on Egypt issued on May 19, the bank said the economy for the rest of 2014 remained weak and fragile.