World Bank Grants $700 Million For Egypt's Private Sector And Green Transition
The World Bank has announced a US$700 million Development Policy Financing (DPF) for Egypt. This initiative aims to enhance private sector involvement, improve macroeconomic and fiscal stability, and promote greener growth.
The newly approved DPF is part of a broader 3-year $6 billion program announced by the World Bank Group in March 2024. This program aims to spur private sector growth, create jobs, enhance human capital outcomes, foster climate resilience, and strengthen economic management.
The DPF aligns with Egypt's development priorities such as the Sustainable Development Strategy Vision 2030, State Ownership Policy, National Climate Change Strategy 2050, and Nexus of Water Food and Energy.
The "Generating Resilience, Opportunities, And Welfare for a Thriving Egypt" DPF addresses short-term economic issues while pushing forward structural reforms. These reforms aim to level the playing field for private sector growth, build economic resilience, and support Egypt's green transition by scaling up renewable energy and improving efficiency in electricity, water, and sanitation sectors.
Dr. Rania A. Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank, stated: "The Government of Egypt is undertaking ambitious economic and structural reforms aimed at creating a more competitive, green and private sector-led economy. Through this budget support instrument, the DPF with the World Bank helps advance policy reforms on three of its top national priorities: building macro-fiscal resilience, enhancing economic competitiveness and improving the business environment, and supporting the green transition. Our longstanding partnership with the World Bank underpins the realization of Egypt's development and reform efforts."
The DPF is the first in a series of three operations. It will support key reforms such as strengthening governance for state-owned enterprises by establishing a legal basis for the State Ownership Policy. It also aims to empower the Egyptian Competition Authority to combat non-competitive mergers and acquisitions.
Additionally, it focuses on enhancing domestic revenue mobilization through accurate payroll tax assessments. Other goals include reducing electricity distribution losses, improving climate adaptation capacity, ensuring financial sustainability in water and sanitation sectors, scaling up renewable energy, and creating a voluntary carbon credit market regulatory framework.
Stephane Guimbert, World Bank Country Director for Egypt, Yemen & Djibouti, commented: "Creating good, sustainable jobs and building resilience to climate change are critical for the current and future prosperity of Egypt's citizens – especially the poor and vulnerable. Reforms supported by this operation are an important step towards a more sustainable, inclusive economy."
Of the $700 million allocated for this DPF, $200 million is contingent on complementary financing from development partners. This ensures that additional resources are available to support Egypt's ambitious reform agenda.
The DPF is also aligned with the World Bank's Egypt Country Partnership Framework for FY2023-FY2027. This framework prioritizes private sector development and is informed by recent analytical work from the World Bank Group on Egypt.
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