Ministry of International Cooperation: Developing a Sustainable Future

by ingy ashraf

According to the Ministry of International Cooperation’s latest annual report, the $10.3 billion investment in the private sector is poised to achieve significant economic growth and unleash the full potential of Egyptian firms.
The EIB leads development partners in providing $2.8 billion in private sector funding. The EBRD comes in second with $2.1 billion, and the IFC comes in third with $1.6 billion.

Many direct and indirect measures from development partners assist the private sector. Increasing collaboration with the EBRD in delivering the second phase of the Suez Canal Economic Zone’s technical support and digital transformation initiative.

The IFC serves as a consultant in implementing the government proposal program and strengthening cooperation with the IFC in the fields of water desalination and private sector empowerment.

The 2023 annual report of the Ministry of International Cooperation, titled “International Partnerships for Sustainable Development: Platforms for Policy and Practice,” reveals a staggering $10.3 billion in development financing channeled towards the private sector by multilateral and bilateral development partners from 2020 to 2023.

The Ministry of International Cooperation’s annual report sheds light on the multifaceted support received by Egypt’s private sector through international partnerships. Over the past years, companies across various industries, including health, agriculture, industry, transportation, education, infrastructure, and technology, have benefited from this collaboration.

Development financing specifically targets key sectors like manufacturing, finance, services, and infrastructure, propelling their growth and contribution to the economy. This support comes in two forms: direct and indirect.
Direct such as, Major national projects are being funded by injecting funds into key infrastructure and development activities.

Capital investment helps businesses grow and expand.

Foreign trade facilitation entails removing barriers and boosting international business prospects.
Advisory and technical services: Providing knowledge and training to improve operational efficiency.
Capacity building is the process of providing businesses with the tools and knowledge they need to succeed. encouraging foreign investment with investment guarantees.

Indirect such as, Technical and advisory assistance: Creating a business environment suitable to private sector growth.

Partnership financing of development projects: Collaborating with private enterprises on initiatives that benefit both parties and the broader economy.

Credit lines: Allowing access to capital for growth and innovation.
The European Investment Bank (EIB) emerged as the major financial partner for the private sector from 2020 to 2023, contributing a massive $2.8 billion. The European Bank for Reconstruction and Development (EBRD) came in second with $2.12 billion, followed by the International Finance Corporation (IFC) with around $1.66 billion.

During that time, the Japan Bank for International Cooperation provided $521 million in private sector financing, the British CDC provided $420 million, the French Development Agency provided $331 million, the Japanese International Cooperation Authority and Sumitomo Bank provided approximately $200 million, and the Asian Infrastructure Investment Bank provided $188 million in private sector financing.

The African Development Bank (AfDB) provided $51.5 million, while the Multilateral Investment Guarantee Agency (MIGA) and the Abu Dhabi Export Office each contributed $100 million. The World Bank Group and the Arab Fund for Economic and Social Development (AFESD) joined forces, each committing $50 million, while the African Export-Import Bank (Afreximbank) and the Islamic Corporation for the Development of the Private Sector (ICD) pledged $44 million and $30 million, respectively. This collaborative effort, totaling more than $545.5 million, illustrates broad-based support for the private sector’s successful journey.

The Saudi Fund for Development, the Green Climate Fund, the European Union, the German Construction Bank, and Switzerland all contributed roughly $78 million. The most prominent partnerships implemented during the current year

Building on the success of the first phase, the second phase of the Suez Canal Economic Zone’s technical support and digital transformation program, a collaborative venture with the European Bank for Reconstruction and Development, was launched in 2023. The initiative, which is aligned with the nation’s strategic priorities, aims to energize the private sector, advocate green transformation, and foster comprehensive and sustainable economic growth. This comes on the heels of significant progress in streamlining procedures for investors within the zone, improving the efficiency of service delivery, and supporting the government’s objective of developing the region into a leading development hub while also strengthening its competitive advantage for global investors.
The second phase intends to streamline administrative procedures, speed investor service management, offer a uniform and automated investor service window, and create an effective, competitive, and environmentally friendly business environment.

Dr. Rania Al-Mashat, Egyptian Minister of International Cooperation, and the President of the African Export-Import Bank (Afreximbank) jointly launched an innovative electronic platform for Engineering, Procurement, and Construction (EPC) contracts at the third edition of the African Intra-Trade Exhibition in Cairo. This ground-breaking program aims to address fundamental obstacles impeding African infrastructure development. The platform aims to close the financing gap and empower a skilled workforce by fostering international cooperation, attracting investments, bridging information gaps, promoting transparent communication, and addressing the skills shortage through technical support and capacity building. This will pave the way for enhanced regional integration and economic prosperity.

Collaborations with the International Finance Corporation (IFC)
The Egyptian government’s connection with the IFC is part of a larger relationship with the World Bank Group (WBG), one of the main multilateral development partners with whom the Arab Republic of Egypt works to support and encourage sustainable development efforts.

Since its creation, the International Finance Corporation (IFC), a member of the World Bank Group (WBG), has invested $7 billion in Egypt. This significant investment is supplemented by a $34 million portfolio dedicated to advising and technical support. Green finance, fintech, healthcare, pharmaceuticals, agribusiness, sustainable manufacturing, and entrepreneurship support are among the industries receiving investment.

Consulting services agreement for government proposals
Egypt’s Prime Minister, Dr. Mostafa Madbouly, signed an advisory services deal with the International Finance Corporation (IFC) in a crucial step toward economic recovery. This agreement, also signed by Dr. Rania Al-Mashat, Minister of International Cooperation, and IFC Managing Director Makhtar Diop, establishes the IFC as a strategic advisor to the government’s proposals program. The IFC will provide critical support and technical knowledge to the government’s IPO program as a result of this collaboration. The IFC will assist in the structuring and preparation of enterprises slated for privatization, as well as the implementation of reforms to improve corporate governance. These collaborative activities attempt to attract capital flows and, eventually, assist Egypt’s ambition of attaining long-term economic growth.

The IFC assists the government proposed program by providing discussions, technical assistance, and the development of an integrated plan to implement the program in a way that increases its pace and meets precisely defined goals.

Partnership agreements with the private sector
Dr. Rania Al-Mashat, Minister of International Cooperation, witnessed the signing of three agreements during the visit of IFC Regional Vice President for Africa, Sergio Pimienta, further cementing the positive collaboration between the Arab Republic of Egypt and the IFC, the World Bank Group’s private sector financing arm. These agreements, which are focused on climate action, funding medium-sized firms, and seawater desalination, represent a significant step forward in Egypt’s collaboration with the IFC.

These agreements are aimed at boosting climate change programs, financing medium-sized businesses, and developing four desalination facilities, in keeping with the IFC’s target of $2 billion in private sector investments during the CPF period 2023-2027.

The International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and the Egyptian Sovereign Fund have formed a pioneering partnership in the management of water resources. This collaboration intends to strengthen the water sector’s public-private partnership (PPP) paradigm by providing expert technical support and consultations for the development of four seawater desalination plants. These cutting-edge facilities, which will be located in Matrouh Governorate and the North Coast region, would initially produce 335,000 cubic meters of clean water per day, with an increase anticipated to reach 650,000 cubic meters. This strategic plan is directly aligned with the Egyptian government’s goals to assure clean water access and contribute to the accomplishment of the UN Sustainable Development Goals (SDGs) by 2030.

Two agreements were also formed between the Foundation, the Commercial International Bank (CIB), and Mediterranea Capital to strengthen collaboration in the areas of medium-sized business support and climate action.

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