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EU and Egypt join forces to mobilise private sector investment at Investment Conference and sign Memorandum of Understanding underpinning €1 billion in macro-financial measures
At the EU-Egypt Investment ConferenceCo-hosted by the EU and the Government of Egypt on 29 and 30 June, the EU and Egypt are teaming up to step up private sector investment in Egypt. They are also signing a Memorandum of Understanding (MoU) for the disbursement to Egypt of up to 1 billion euros in Macrofinancial Assistance. The Investment Conference and the signing of the Memorandum of Understanding are the first concrete results of the Strategic and comprehensive partnership (the Partnership), signed by the EU and Egypt in March 2024, in recognition of the important geostrategic role that Egypt plays as a pillar of stability in the region.
Opening the Investment Conference, European Commission President Ursula von der Leyen He said: “One hundred days ago, we ushered in a new era in relations between Egypt and the European Union, with our comprehensive strategic partnership. Today, we have delivered. We have delivered €1 billion in macro-financial assistance to Egyptian businesses and entrepreneurs, which will spur the reforms that private sector businesses and entrepreneurs need. We have delivered strategic investments that will help make Egypt a clean energy hub at the heart of the Mediterranean, a crossroads. And we have delivered for Egypt’s youth, with a new skills programme to enable them to succeed in the economy of the future. And this is just the beginning.”
Investment Conference
O Investment Conference is a fundamental platform for discussion on economic reforms pursued by Egypt to improve the business environment and attract more EU investment in key sectors. These reforms and investments are expected to drive the energy transition, in areas such as renewable hydrogen production, to promote the circular economy and to boost the pharmaceutical, medical and automotive sectors. Investments are also targeted at sustainable agriculture and food systems, water security, as well as innovation and digitalization. The Investment Conference brings together around 1,000 participants, including representatives of the EU and Member States, senior Egyptian officials, international financial institutions and CEOs of European and Egyptian companies.
A significant number of private investment agreements Deals worth €40 billion are expected to be announced and signed by European and Egyptian companies at the Investment Conference, including in sectors such as renewable energy and hydrogen.
At the Conference, the EU and the Government of Egypt sign the Sustainable Green Industry Program. The programme, supported by a €30 million EU grant that unlocks a €271 million loan from the European Investment Bank (EIB) and partner banks, will help industry in Egypt invest in pollution reduction, decarbonisation, energy and resource efficiency.
For boost employability and skills of young people, support Egypt to fill the gaps in the child protection system It is to improve production capacities and access to vaccines, medicines and health technologies, the EU and the Egyptian government are signing three financing agreements, worth €36 million in total, as part of bilateral cooperation programs. A 60 million euros EU support package for improve grain storage in Egypt under the Food and Resilience Mechanism is also being signed at the Conference.
The EU and Egypt are also signing the Financing agreement for the Interreg NEXT MED cooperation programmewhich aims to promote fair, equitable and sustainable development throughout the Mediterranean Sea Basin and, as such, contribute to the EU Agenda for the Mediterranean. With an EU contribution of €263 millionNEXT MED is the largest EU-funded external cooperation programme in the Mediterranean Sea Basin. It brings together the coastal territories of 15 countries (7 EU and 8 partner countries), including Egypt.
Signing of Memorandum of Understanding for up to €1 billion in Macro-Financial Assistance
The until 1 billion euros in Macrofinancial Assistance (AMF) is the first of two MFA operations for Egypt which is to provide a total of up to €5 billion in soft loans to Egypt. This MFA support constitutes the vast majority of the €7.4 billion in EU financial support under the Partnership.
MFA operations will help meet Egypt’s external financing needs. They will also support the implementation of an ambitious political program containing strong and immediate adjustments and structural reforms to help put Egypt’s economy on a sustainable economic path.
At the Conference, the Memorandum of Understanding (Memorandum of Understanding) for the first MFA operation is being signed. The MoU sets out a set of relevant and macro-critical national reforms that are considered feasible to be delivered within the short assistance horizon of this operation, where disbursement is expected before the end of 2024. The agreed policy action covers three pillars: it is expected to promote macroeconomic stabilityimprove business environment and improve Egypt competitivenessand support Egypt green transition. In some cases, policy actions are stepping stones towards more ambitious and comprehensive reform efforts in the medium term, which could be considered as part of the reform agenda to be negotiated in the subsequent €4 billion MFA operation, once adopted by the Council and the European Parliament.
Subject to progress on the reforms agreed in the Memorandum of Understanding, the corresponding disbursement of up to €1 billion in AMF support could take place in a single tranche at the end of 2024.
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The Council adopted the short-term AMF of up to €1 billion on 12 April 2024.
A long-term MFA operation worth up to €4 billion is expected to be adopted by the European Parliament and the Council later this year. This will be followed by the negotiation of the reform programme underpinning this second MFA, which will be set out in a second MoU.
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(Quotes)
One hundred days ago, we ushered in a new era in relations between Egypt and the European Union, with our comprehensive strategic partnership. Today, we have delivered. We have delivered for Egyptian businesses and entrepreneurs with €1 billion in macro-financial assistance, which will spur the reforms that private sector businesses and entrepreneurs need. We have delivered strategic investments that will help make Egypt a clean energy hub at the heart of the Mediterranean, a crossroads. And we have delivered for Egypt’s youth, with a new skills programme to enable them to succeed in the economy of the future. And this is just the beginning.
Ursula von der Leyen, President of the European Commission
The EU is committed to strengthening its ties with Egypt, a strategic partner and an important pillar of regional stability. Our macro-financial assistance is linked to a series of economic policy reforms for Egypt to address its vulnerabilities, increase resilience and support the green transition. This sends a strong signal to international investors of Egypt’s commitment to reform and its willingness to substantially improve the business environment. As a symbol of closer cooperation between Egypt and the EU, this short-term support will also make Egypt’s growth path more sustainable and inclusive.
Valdis Dombrovskis, Executive Vice President for an Economy that Works for People
Today’s investment conference is a testament to the predictable and reliable Strategic and Comprehensive Partnership between the EU and Egypt for our shared prosperity, stability and security, and for our growing positive agenda that delivers. The first €1 billion of the €7.4 billion financial and investment package is a reality. These investments will open up new opportunities for our investors, particularly in renewable energy and the green transition. Within this package, further investments will modernise the economy, create growth and jobs, and develop human capital. This is just the beginning, with more to come.
Olivér Várhelyi, Commissioner for Neighbourhood and Enlargement