EU to Allocate $8.4 bn Financial Aid to Egypt
As part of this agreement, the EU has committed a substantial funding package totaling €7.4 billion to assist Egypt in addressing its financial challenges.
Egyptian President Abdel El-Fattah El-Sisi and European Commission President Ursula von der Leyen have formalized a joint political and financial aid document aimed at funding trade, security, renewable energy, and more. The financial aid package aims to help Egypt with its current economic challenges and enhance the relationship with the European Union (EU) into a "strategic and comprehensive partnership." [1]
As part of this agreement, the EU has committed a substantial funding package totaling €7.4 billion ($8.06 billion) to assist Egypt in addressing its financial challenges.[2]
Over the next three years, Egypt is slated to receive various forms of support from the EU, including €5 billion ($5.44 billion) in macro-financial assistance, €1.8 billion ($1.96 billion) in investments, and €600 million ($653.35 million) in grants. Notably, the North African nation is set to receive €1 billion ($1.09 billion) in emergency funding within this fiscal year alone, underscoring the urgency of addressing immediate economic needs.
The International Monetary Fund (IMF) has recently expanded its Extended Fund Facility (EFF) loan programme for Egypt from $3 billion to $8 billion in response to the repercussions of the Israeli war on Gaza.
This EU financial aid package, the IMF loan, and a previous announcement of a $35 billion investment initiative by Abu Dhabi-based ADQ to develop Egypt's Ras El-Hekma region come amid a severe US dollar liquidity shortage Egypt has faced since March 2022 and has affected all the economic sectors in the country.