The European Bank for Reconstruction and Development (EBRD) is reinforcing its support for the Egyptian economy with $300 mln of fresh facilities to two leading banks in Egypt to support businesses and help them respond to the impact from the coronavirus pandemic.
Egypt is a founding member of the EBRD and since the start of its operations there in 2012, the bank has invested close to €6.5 bln in 115 projects in the country.
The first of the two new facilities is a $200 mln financing package to National Bank of Egypt (NBE), the largest commercial lender in the country, for trade and for on-lending to local companies impacted by the coronavirus pandemic. The second facility is a $100 mln loan to the Commercial International Bank (CIB), the third largest bank in Egypt.
Under the first facility, the EBRD will provide a $100 mln loan to help NBE provide short-term loans to private small and medium-sized enterprises and firms facing liquidity strains due to a decrease in their activities and turnover caused by the COVID19 crisis.
In addition, the European bank is increasing an existing uncommitted trade finance limit for NBE by $100 mln under the EBRD’s Trade Facilitation Programme to reach $300 mln, to help meet the increased demand for import and export transactions.
“Strengthening this segment of the Egyptian economy, the local small businesses which are the backbone of the economy, has never been more important than during this crisis,” said Jurgen Rigterink, EBRD First Vice President.
“This new facility, under the EBRD’s Solidarity Package, targets a crucial segment of the economy, which we will continue to support, thus ensuring its resilience,” said NBE Chairman Hisham Okasha.
“This facility comes on the heels of an increase of $100 mln in our trade finance programme with the EBRD as well as the signing of a package in the amount of $150 mln to support young people in business, skills in business and green climate financing,”
Since the NBE cooperation with the EBRD began in 2013, credit and trade finance lines have been signed, including in support of women in business and to strengthen energy efficiency.
In the second facility to Egypt, EBRD is reinforcing its support for the Egyptian economy with a $100 mln loan to CIB, a longstanding partner bank of the EBRD.
This credit line will help CIB provide short-term loans to private small and medium-sized enterprises and corporations facing liquidity strains due to a decrease in their activities and turnover caused by the crisis.
“In these unprecedented times, strong relationships that span years are bearing fruit, for example in the mutual trust and understanding between CIB and the EBRD,” said Hussein Abaza, CEO of CIB.
“This facility is a testament to CIB’s strength as a financial institution and reinforces our leading position and sound credit judgement. We all look forward to coming out of this period even stronger.”
CIB has been a partner of the EBRD since 2014 through the extension of a trade finance facility, which was followed by a subordinated loan in 2017.