The European Investment Bank, the European Union's long-term financing institution has arranged a EUR 50 million (1) loan with the Industrial Development Bank of Egypt (IDBE) to support investment by small and medium sized enterprises.
The IDBE is a public sector financial institution specialising in providing medium to long-term funding to private industrial projects in Egypt. The EIB loan will allow IDBE to increase and diversify its long-term funding sources and to step up its long-term lending, particularly in foreign exchange required for projects promoted by export-oriented small and medium sized enterprises (SME). The finance is aimed at supporting investment by Egyptian companies which are expanding and developing new products and markets, including start-up, modernisation and restructuring and the promotion of growth. The loan reinforces the development of a competitive SME sector to meet the challenges of the creation of a Euro-Mediterranean free trade area, as foreseen under the Euro-Mediterranean Partnership. The EIB's loan is made under the Bank's second Euro-Med mandate covering the period 2000-2006.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries. In the Mediterranean region, the EIB operates under the new Euro-Mediterranean Partnership, which complements the EU Member States' own bilateral co-operation policies. The Bank has been entrusted with a second mandate, this time to provide up to EUR 6 425 million over the period 2000 - 2006 for financing projects in the 12 southern-rim Mediterranean countries which have signed cooperation or association agreements with the EU.
Total EIB financing since 1978 in Egypt amounts to some EUR 1.5 billion. Particular emphasis is being given to supporting industrial development, through financing large scale industrial schemes, as well as global loans to the Egyptian banking sector for on-lending to small and medium sized enterprises investing in medium to long term productive projects. Economic and public infrastructures have largely benefited from EIB funding.
(1) 1 EUR = 3.23260 EGP