EGYPT INCLUSIVE GROWTH FACILITY

Loan for small and medium-sited enterprises (SME) and mid-caps to strengthen the support to Egyptian businesses, including financially underserved and excluded businesses.

The operation aims to strengthen the support to financially underserved and excluded businesses in Egypt.

The operation aims to finance eligible small and medium sized investments undertaken by SMEs and Mid-Caps in Egypt, thereby contributing to economic resilience, employment generating activities and alleviating the economic burden of the Covid-19 crisis in the country. SMEs make up the vast majority of firms in Egypt and, as such, play a vital role in creating and safeguarding employment, especially in rural communities, among young people and women. The proposed operation is expected to enhance access to finance to SMEs and Mid-Caps, in that it will allow the selected financial intermediaries to make available funding at improved terms and conditions. Particular attention will be given to access to finance in rural areas of the country. It is expected that 50% of allocations under this operation will come from enterprises located in less developed areas of Egypt, outside the main cities of Cairo and Alexandria. The long term EIB funding, improvement in lending/reporting/monitoring practices and standards together with TA would allow to further strengthen the capacity of the Borrowers to sustainably expand their MSME loan portfolio in rural and underserved areas of the country with a particular focus on digital outreach.

The project is in line with EU-Egypt cooperation priorities as documented in the Joint Communication on the renewed partnership with the Southern Neighbourhood. The Joint Communication emphasizes the need for MSE support and recognises that the MSE funding gap is a real constraint to development. The project is expected to contribute to SDG 1 (no poverty), SDG 5 (gender equality) and SDG 8 (decent work and economic growth).

The Bank will require the intermediary institution to take all the requisite measures to ensure that the procedures including procurement procedures carried out by the final beneficiaries for the sub-projects receiving Bank financing will comply with national legislation and the ElB's Environmental and Social Standards as well as international treaties and conventions signed and ratified by or otherwise applicable and binding in the country.

The Bank will require the intermediary institution to take all requisite measures to ensure that any procurement procedures carried out by final beneficiaries for the sub-projects that the Bank finances are in accordance with the Bank's Guide to Procurement.