Maiet confirms IMF to grant Egypt $1.3 bn in additional financing

The International Monetary Fund approved an additional US$1.3 billion in financing for Egypt, IMF official and former Egyptian Finance Minister Mohamed Maiet told domestic news outlets on Monday night.

The new funding will come from the international lender’s Resilience and Sustainability Facility (RSF), which Egypt applied for alongside its existing program.

The IMF also agreed to disburse the fourth tranche, $1.2 billion, of its ongoing Extended Fund Facility (EFF) with Egypt within a week, Maiet told the intelligence-owned Youm7 on Monday night.

Since 2016, Egypt has repeatedly turned to the IMF for loans while grappling with a foreign currency shortage amid mounting external debt.

In the Monday interview, Maiet, who is the head of the IMF’s Arab Group, stated that the new RSF financing will be disbursed in tranches, with the timing to be determined later. The fund will also set policy expectations on climate change within the program, including targets for renewable energy, water and carbon emissions.

Egypt’s government has already committed to policy adjustments under the EFF, including measures to reduce the state’s role in the economy.

“Staff and authorities agreed on the need to speed up reforms to improve the business environment,” IMF Mission Chief for Egypt Ivanna Hollar said, after approving Egypt’s fourth program review in December.

Program recommendations under earlier loans saw the government devalue the Egyptian pound and draw back subsidies on food and fuel, increasing the cost of living for over 100 million citizens and pushing many beneath the poverty line.

The fund agreed on the EFF with Egypt amid a foreign capital flight crisis in 2022, later augmenting it to an $8 billion loan agreement in March 2024.

Egypt requested the RSF four years ago, but fund and government officials have remained tight-lipped on why the financing is being granted now.

When IMF spokesperson Julie Kozack announced that the RSF would be on the board’s agenda in March, she said it had “no connection” to US President Donald Trump’s plan to forcibly displace Palestinians from Gaza to Egypt.

Egypt has repeatedly rejected the plan, which has been floated since 2023 amid rumors of a financial offer in exchange.

Cairo hosted a conference earlier this month to propose an alternative plan for Gaza’s reconstruction while ensuring its Palestinian residents remain in the strip, estimating the cost at over $50 billion. It announced plans to hold a second conference “very soon” to secure funding.

Nonetheless, while Arab states endorsed Egypt’s reconstruction plan for Gaza without the displacement of its residents, the US and Israel have continued to reject it.