Egypt receives $500 million from Saudi, secures funds from Kuwait and EBRD

Saudi Arabia has transferred US$500 million to Egypt as part of a $2.5 billion grant, Minister of International Cooperation Sahar Nasr confirmed to Reuters on Wednesday.

The grant was approved in a May 26 Cabinet meeting, and is part of a deal signed in April, according to a Cabinet statement.

Egypt also signed a large loan agreement with Kuwait this week, while the European Bank for Reconstruction and Development (EBRD) announced plans to increase their investments in the country.

On Tuesday, Nasr and the head the Kuwait Fund for Arab Economic Development signed a US$100 million financing deal for five water desalination plants in South Sinai. The aid comes in the form of a soft loan with a 2 percent annual interest rate, a five-year grace period and 25-year payment period, the Ministry of International Cooperation announced.

The funds will go toward developing seawater desalination plants in Al-Tur City, Ras Sedr, Abu Zenima, Dahab and Nuweiba, with work expected to commence in 2017 and be completed by 2019. According to Nasr, the desalination project is the first agreement in a plan to develop $900 million worth of Sinai project in cooperation with the Kuwait Fund for Arab Economic Development.

At a separate Tuesday meeting with President Abdel Fattah al-Sisi, EBRD president Suma Chakrabarti said the bank intends to make 700 million euros worth of new investments into projects in Egypt, according to the presidency. Since 2012, the EBRD has financed 34 projects worth more than 1.7 billion euros, with a focus on the financial sector, agribusiness, manufacturing and infrastructure projects.

Officials have not yet confirmed whether the United Arab Emirates has transferred a US$2 billion Central Bank deposit. The US$2 billion deposit was pledged in April along with an additional US$2 billion in investments. Central Bank Governor Tarek Amer told state news agency MENA he expected the funds to arrive by the end of May.

Egypt is also waiting on a US$1 billion World Bank loan signed in December.

With revenue from traditional sources like tourism and foreign investment remaining far below pre-2011 levels, Egypt has become increasingly dependent on aid from allied governments and multilateral funders. According to Central Bank figures, Egypt’s external debt has risen from below US$35 billion at the end of 2010 to almost US$48 billion at the end of 2015.