By Ingy Ashraf
The Ministry of International Cooperation emphasizes the necessity of innovative finance options for advancing development initiatives in its 2023 annual report. The groundbreaking debt swap agreement established with China in 2023 was a remarkable milestone, marking an important moment in bilateral cooperation.
This innovative approach tries to reduce debt burdens while also channeling money to essential development projects. According to the press release, “the debt swap program works to support the efforts of the Egyptian government in partnership with the Chinese side to achieve sustainable development, by using tranches of Chinese debt to implement development projects.”
A significant step forward in Egypt-China relations was achieved during Prime Minister Madbouly’s visit with the signing of a memorandum of understanding. This agreement lays the initial groundwork for future collaboration, with the specifics of joint projects to be identified through ongoing discussions. This groundbreaking initiative underscores the deepening strategic partnership between the two countries and their commitment to exploring new avenues of cooperation.
While the agreement with China is significant, the report also discusses the long-standing success of debt exchange programs undertaken in partnership with Italy and Germany. These two-decade-long collaborations have resulted in almost $720 million in funding for nearly 120 development initiatives in a variety of sectors.
Italy is divided into three phases: The program began in 2001 and currently consists of three phases totaling $350 million.
Projects address food security, the environment, education, and gender empowerment.
Recent Developments: The third phase was extended until 2024 in May 2023, with projects such as wheat management silos and fish farming receiving ongoing assistance.
Germany is divided into three stages: The initiative began in 2011 with a total budget of €240 million and was implemented in three phases.
Project Priorities include education, renewable energy, and electricity transmission.
The third phase is now ongoing, with the “School Nutrition” project and a €54 million electrical transmission project in the works.
The governance systems designed for each program ensure that monies are used efficiently and effectively. Egypt has effectively utilized debt swaps as a significant weapon for advancing sustainable development and accomplishing national agendas through these strategic collaborations.
