Egypt Set For $3 Billion loan, In Part For Sustainable Projects, Sources Say

A man rides a bicycle past Emirates NBD head office in Dubai, UAE January 30, 2018. REUTERS/Satish Kumar

Egypt is expected to finalize a $3 billion loan to be used in part to finance sustainable projects, three sources said, as the nation attempts to recover from a drop in tourism during the COVID-19 pandemic.

The financing, arranged by Emirates NBD (ENBD.DU) and First Abu Dhabi Bank (FAB.AD), follows the repayment earlier this year of a $2 billion facility Egypt borrowed last year, one of the sources said.

Part of the loan will be "green", meaning proceeds will be used to finance sustainable projects, and part will be Sharia-compliant, the sources said, asking not to be named because the deal has not been made public.

A group of conventional and Islamic banks are taking part in the syndication process, they said.

Egyptian officials were not immediately available to comment on the new loan. Emirates NBD and FAB declined to comment. The new transaction was initially marketed to banks with a $2 billion size but was increased because it was over-subscribed, two of the sources said.

It will need parliamentary approval to be finalized, one of the sources said.

In August last year, Egypt raised a $2 billion loan arranged by Emirates NBD and FAB to finance the state budget and support the economy.

That facility, split into conventional and Islamic tranches, had a one-year duration, while the new loan will have a three-year tenor, two of the sources said.

Fitch Ratings last month affirmed the country's long-term foreign currency rating at B+ with a stable outlook, saying it had shown stability and resilience during the pandemic but had a budget deficit of around 7.5% of gross domestic product.

The loss of tourism during the pandemic reduced one of Egypt's major sources of foreign currency.

Next year, it will host U.N. climate talks that will attempt to further progress at the Glasgow conference this month on limiting global warming.


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