Egypt Says Set to Get $300 Million Budget Support from AIIB

The logo of the Asian Infrastructure Investment Bank (AIIB) is displayed at the bank's headquarters building in Beijing, China, on Thursday, Jan. 5 2017. One year after opening with 57 charter members, the China-led AIIB remains open to the U.S. joining, President Jin Liqun said. Photographer: Qilai Shen/Bloomberg Photo by Qilai Shen /Bloomberg

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(Bloomberg) — Egypt is close to getting $300 million of budget support from the Asian Infrastructure Investment Bank, according to a top official.

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“It’s fully negotiated and just going through the paperwork on our side,” Rania Al-Mashat, Egypt’s minister of planning, economic development and international cooperation, told Bloomberg in Washington on Thursday. It’s expected to be finalized by around June, she said.

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The help from the Beijing-based bank will give a further boost to the Middle East’s most populous country, which emerged from its worst economic crisis in decades last year thanks to a $57 billion global bailout.

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Al-Mashat, who was attending the International Monetary Fund-World Bank spring meetings, added the government is looking at more deals where debt it owes to other countries is turned into equity investments in Egypt. Recent examples include the United Arab Emirates swapping $11 billion of deposits at the Egyptian central bank for real estate investments. That was part of a $35 billion package from the UAE last year, comprising the bulk of the international bailout.

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In addition, Kuwait is in advanced discussions about converting $4 billion of deposits held in Egypt into investments, Bloomberg reported last week. The UAE deal “was a very important demonstration effect, and therefore it provides guidance for other countries who want to do the same,” said Al-Mashat.

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“We are in negotiations with Germany on another debt-swap deal,” Al-Mashat said, adding that Berlin would likely invest in energy-transition projects.

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Such agreements “bring down our external debt,” she said. “So, that’s very credit positive. And hence the external debt-percentage of gross domestic product improves.”

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Egypt is also in discussions with China about converting some Egyptian debt into interest-free loans to finance key development projects, Egyptian state-owned website Ahram Online reported last week.

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Egypt’s economy grew in the final three months of 2024 at its fastest quarterly pace in more than two years. 

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The North African nation is rated far into junk territory by the major credit-rating companies. Still, it was upgraded by Fitch Ratings in November for the first time since 2019 to B from B-.

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Al-Mashat said a recent decision to privatize the management and operation of around 11 airports in Egypt has sparked interest from investors. The World Bank’s private-sector investment arm, the International Finance Corp., is helping the government organize the transactions.

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