Japan to fund projects worth LE18 billion, host 2,500 Egyptian students

President Abdel Fattah al-Sisi arrived in Japan on Monday for his first official state visit to the country.

Sisi and Japanese Prime Minister Shinzo Abe appeared in a joint press conference, during which Abe announced that Japan would invest 2 trillion Japanese Yen (approximately LE18 billion) in Egyptian business initiatives with Japanese companies, the Japanese Times reported.

The majority of bilateral initiatives with Japan will be in the energy, electricity and civil aviation sectors, worth a total of US$500,000, the Ministry of International Cooperation stated on its official Facebook page.

The Minister of International Cooperation, Sahar Nasr, signed a soft loan, with a below-market interest rate, for an energy deal worth 24.7 billion Japanese Yen (approximately $243.3 million).

The loan is aimed at improving the energy efficiency of Egypt’s Electricity Ministry, the Egyptian Electricity Holding Company and companies distributing electricity throughout Egypt, and is to be paid back over a 40-year period, with an annual interest rate of 0.3 percent and a 10-year grace period.

Japan also agreed to fund the building of a solar power plant in Hurghada, pledging a soft loan of 11.2 billion Japanese Yen (approximately $91 million) for the initiative.

A third deal was agreed for the construction of a new terminal for Borg al-Arab airport, for which Japan promised another soft loan of 18.2 billion Japanese Yen (approximately $152 million) to help fund the project, the Ministry of International Cooperation stated.

A number of these deals have been in the pipeline for a while or are progress on long-standing arrangements. For example, Japan first signed an agreement to fund the new Borg al-Arab airport in 2014, agreeing to a $167 million loan. A deal was also made between the two nations in 2015 for the Hurghada power plant project, with a soft loan of $100 million pledged at the time.

Japan also agreed to finance a wind farm in Gabal el-Zeit in February 2015 and an aqueduct project in Upper Egypt in March 2015.

During Sisi's visit, Abe also announced a deal for Japan to host 2,500 Egyptian students over the next five years as part an educational cooperation initiative.

In his speech to the Japanese parliament, Sisi said he admires the nation’s example in both social and economic development and is keen to foster further ties between the two countries.