Egypt plans to officially apply for US$1 billion in loans from the World Bank and the African Development Bank, the Egyptian government announced Thursday.
At a press conference following a meeting of the cabinet’s economic commission, Minister of Planning and International Cooperation Fayza Abouelnaga said each loan is for $500 million and will be allocated for the state budget deficit.
She added that a World Bank mission has been invited to visit Egypt to discuss the loan, which will carry interest rates ranging between 0.7 and 0.8 percent.
Egypt announced last week that it had formally asked the International Monetary Fund for a $3.2 billion loan, saying it wanted the money as soon as possible and hoped an agreement would be signed within weeks.Interest for this loan has dropped from 1.5 to 1.1 percent, in accordance with global rates.
The IMF, however, says any agreement will first have to attract broad political support within the country and be accompanied by financial commitments from international donors. Working out the technical details of a loan will take two to three months, it said.
Massoud Ahmed, head of an IMF delegation which visited Egypt on 16 and 17 January, told Al-Masry Al-Youm that it would not impose stringent conditions on the country in exchange for the loan.
IMF aid is a sensitive issue in Egypt because the IMF is expected to ask the government for assurances that it will curb state spending, an explosive issue in a country where frustration over poverty has caused unrest.
Translated from Al-Masry Al-Youm
