Under the Facility for Euro-Mediterranean Investment and Partnership (FEMIP), the European Investment Bank, the European Union's financing institution, is providing EUR 60 million, in support of the private sector in Egypt.
The funds, in the form of global loans, will be channeled through major Egyptian partner banks, to small and medium-sized private sector projects in the areas of industry, services and tourism, as well as agro-food. In a first phase the partner banks include the Export Development Bank of Egypt (EDBE) and the National Bank of Egypt (NBE).
The finance agreement has been signed yesterday in Luxembourg by Mr Philippe de Fontaine Vive, EIB Vice-President, in charge of FEMIP, and Mr Mohamed Sherif SHARAF, EDBE Chairman.
Mr Philippe de Fontaine Vive at the signature ceremony stated: With this joint effort, FEMIP remains committed to support worthwhile investment projects, via reliable local banking partners, in the productive sectors of the Egyptian economy. A broadened base of partner banks will further assist to stimulate private sector activity. This ties in with FEMIP's priorities, which aim at liberalisation of the economy and economic cooperation between the Mediterranean Partner Countries underpinned by the Barcelona Process.
According to Mr Mohamed Sherif SHARAF, with this cooperation EDBE is now hoping to have even greater reach to the SME sector throughout the country. This global loan is part of the efforts to further develop the private sector in the Mediterranean Region, intensifying thereby support for Small and Medium size Enterprises (SMEs) by serving existing needs for term financing, and contributing to the availability of domestic long-term lending facilities.
FEMIP is a major step forward in financial and economic cooperation between the Union and the Mediterranean Partner Countries (MPCs). It foresees EUR 8-10 billion funding of investment in the MPCs by 2006. It has at its disposal funds under the existing Euro-Mediterranean mandates, risk capital resources and technical assistance funds from the EU budget. FEMIP's top priority is to promote private sector development (especially SMEs and FDI) and support projects helping to establish a favourable climate for private investment (economic infrastructure, health and education schemes). FEMIP's ultimate goal is to help the MPCs meet the challenges of economic and social modernisation and enhance regional integration in the run-up to the creation of a Euro-Mediterranean free-trade area planned for 2010.
Since 1978, Egypt has received financing of some EUR 3 billion. This has been concentrated on support for infrastructure, environmental schemes and private sector businesses - encompassing both large corporates stemming from cooperation between local and European operators and SMEs financed in partnership with the Egyptian banking sector. In 2003, Egypt received a total of EUR 509.5 million for the construction of an LNG plant at Idku, the construction of second 650 MW module for a natural gas-fired combined-cycle power plant at Nubariya and modernisation and extension of the wastewater collection and treatment network in Cairo. In 2004 EUR 100 million was for the south-north gas pipeline across Jordan.