23 July 2024 04:25 AM

The High-Level Forum of the International Finance Corporation (IFC) in Egypt

Saturday، 11 May 2024 - 12:00 AM

Dr. Rania Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank Group, participates in the activities of “IFC Day in Egypt,” and will also kickstart the high-level forum organized by the International Finance Corporation (IFC). This is part of IFC Vice President for Africa Sergio Pimenta’s visit to Egypt from May 11 to May 13.

The IFC, a member of the World Bank Group, is organizing the forum with the participation of senior officials from the government and the private sector, within the framework of enhancing efforts to empower the private sector and discussing the opportunities and challenges facing the Egyptian economy.

This reflects the close partnership between the Arab Republic of Egypt and the World Bank Group and its affiliated institutions, through the Country Partnership Framework 2023-2027, as Egypt is one of the largest countries of operations for the IFC, with an investment portfolio estimated at approximately $8.9 billion, in addition to consultations and technical support amounting to its value is $34 million.

The forum is scheduled to witness high-level participation from the government side and private sector institutions, where a number of discussion sessions will be held that discuss sustainable investment opportunities in Egypt, and explore challenges and opportunities regarding enhancing competitiveness, sustainability, and creating job opportunities in the private sector in Egypt, as well as strengthening the partnership between the government and private sectors. The forum will also witness the signing of agreements with the government and private sectors.

Activities

Sunday, 12 May 2024

Prime Minister Mostafa Madbouli witnessed, on Sunday, 12 May 2024, the opening session of activities of the “International Finance Corporation Day in Egypt” (IFC), in the presence of a number of ministers.

Dr. Rania Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank, delivered the opening speech during the “IFC Day in Egypt” activities, during the visit of Mr. Sergio Pimenta, Vice President of the International Finance Corporation for the Africa Region, to Egypt, in the presence of Dr. Mostafa Madbouly, Prime Minister and a number of government ministers and private sector officials.

At the beginning of her speech, the Minister of International Cooperation said that the activities of IFC Day in Egypt has become an annual meeting, through which we affirm our commitment and our joint efforts to support the private sector, in implementation of the directives of H.E. President Abdel Fattah El-Sisi, which he announced at the beginning of his new presidential term; regarding the necessity of empowering the private sector as a major partner in leading development efforts.

Al-Mashat explained: “In my capacity as Governor of Egypt at the World Bank Group, our relationship with the IFC comes within a broader Country Partnership Framework, launched in 2023, with the bank and its affiliated institutions: the Multilateral Investment Guarantee Agency (MIGA) and the International Bank for Reconstruction and Development (IBRD). It focuses on a number of goals, most notably creating a supportive environment for private sector-led investments and creating job opportunities.”

Al-Mashat highlighted the relationship with the IFC, which has provided financing and investments to the private sector worth approximately $9 billion, in addition to a portfolio of advisory services worth $34 million, since the institution began its work in Egypt, making Egypt one of the largest countries of operation for the IFC. 

It is worth noting that the IFC’s investments are diversified in many fields, most notably sustainable infrastructure, renewable energy, financial services, agribusiness, manufacturing, startups, investment funds, and health. They are not limited to large companies only but are also directed to startups and entrepreneurship and small and medium enterprises.

Al-Mashat pointed out that the ministry monitors the path of development in the relationship with the IFC, which witnessed development despite the repercussions of the COVID-19 pandemic, the Russian-Ukrainian war, and regional and international challenges. The institution’s investment and financing portfolio during the period from 2020 to 2023 amounted to approximately $2.5 billion, while the volume of investments during the period from June 2023 until this May alone amounted to about $900 million, which reflects the continuous increase in the IFC’s investments and financing in Egypt, and the attractiveness of the Egyptian private sector for financing and investments from various development partners.

Al-Mashat noted that, within the framework of the future partnership, it was announced earlier, in a joint statement with the World Bank last March, that $6 billion would be available from the World Bank over the next three years, to support the government’s reforms, including $3 billion for various government sectors, and $3 billion to support the private sector provided by the IFC at $1 billion annually.

She added that building on these efforts, today the Minister witnessed the signing of a new $100 million financing agreement between the IFC and Banque Du Caire, to finance private-owned Micro, Small and Medium enterprises, including women-owned MSMEs and finance trade. 

She stressed that a strong private sector creates added value, provides jobs, encourages exports, and stimulates innovation and digitization. Therefore, our partnership with the International Finance Corporation in Egypt is based on three main pillars, promoting "employment", especially in labor-intensive sectors, export industries, sustainable manufacturing, agro-industries and tourism. "Inclusion", with a focus on health care, education and "integration", by supporting the cooperation with countries in the region through improving the infrastructure. 

Al-Mashat continued: The Ministry of international cooperation, in coordination with international institutions, is working on the formulation of budget support programs for the implementation of the structural reforms by the national stakeholders, and its main focus is to improve the competitiveness of the economy and improve the business environment through supporting the green transition, and the latest of these programs is the financing for development policy framework (DPF) with the World Bank, with the participation of other financial institutions, and we are working altogether to finalize it soon.

Al-Mashat pointed out that international financial institutions are working to develop new mechanisms and innovative financing tools, which provide more financing opportunities for the private sector, in the context of seeking to reshape the global financial system, and the insufficient funding of multilateral development banks and government investments to bridge the development financing gap.

She also noted that as a model for these tools, the World Bank Group aims to launch a unified guaranteed platform on the first of next July, doubling the investments and guarantees made available by the IFC.

She said that the Ministry of International Cooperation is working on preparing workshops soon to inform private sector companies about this new platform and the services it provides, thus expanding the range of financing tools available in the local market.

Private Sector Engagement Portal:  Hub for Advisory, Finance and Investment for Enterprises

To this end, the Ministry of international cooperation is preparing workshops to inform private sector companies about this new platform and the services it provides, thus expanding the range of financing tools available in the local market. For our part, we launched the Private Sector Engagement Portal:  Hub for Advisory, Finance and Investment for Enterprises to support the private sector last December, which works to fill the information gap, enabling the private sector to view a full list of advisory services, technical support and funding provided by development partners.

Al-Mashat added that they have received a large demand from various companies for the platform's services, which identified 80 financial and non-financial services, along with hundreds of tenders and other services since its launch last December.

One of the most important pillars of the reform of the global financial system is cooperation and coordination between development banks and international financial institutions to provide joint financing to maximize investment opportunities. Despite the new requirements, Egypt is a model for this type of financing, as we have succeeded in involving multiple financial institutions with different governance frameworks and rules in many projects. 

This is evident in various economic sectors, for example, the partnership signed between International Financial Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and the Sovereign Fund of Egypt (SFE), to provide advisory services and assistance in the design, financing, construction and maintenance of desalination plants, through a partnership between the government and private sectors. 

IFC also led an alliance of 9 international banks to invest in the Benban Solar Park in Aswan.

In addition, IFC is a major partner with the private sector in financing the investments of the energy pillar within Egypt’s Country Platform of the Nexus of water, food, and Energy (NWFE), where it participates in financing the Abydos power plant with a capacity of 500 MW in Aswan, and the Amunet plant in Ras Gharib region to generate electricity from wind power with a capacity of 500 MW.

Furthermore, the IFC also participated in the preparation of the Egyptian file in the Nature, People, and Climate Initiative of the climate investment fund (CIF), where the Egyptian file wins the first place at the level of North Africa and Europe, and benefits from grants and concessional financing provided by the initiative for climate projects in Egypt. These efforts culminated today with the signing of a new agreement for advisory services between the International Finance Corporation and the Universal Health Insurance Authority.

Al-Mashat said: “Today, we culminate in the signing of a new agreement for advisory services between the International Finance Corporation and the General Authority for Comprehensive Health Insurance.”

As part of the "International Finance Corporation Day in Egypt" event Dr. Rania Al-Mashat, Minister of International Cooperation, witnesses the signing of an agreement between Banque du Caire and the International Finance Corporation worth $100 million... and the consultancy agreement for the comprehensive health insurance system

As a reinforcement of the long-term partnership between the Arab Republic of Egypt and the International Finance Corporation (IFC), a member of the World Bank Group, Dr. Rania Al-Mashat, Minister of International Cooperation and Egypt's Governor at the World Bank, witnessed a financing agreement between the International Finance Corporation and Banque du Caire worth $100 million, in addition to a consultancy agreement with the General Authority for Comprehensive Health Insurance.

This took place during the "IFC Day in Egypt" event, which began today with the presence of Dr. Mostafa Madbouly, the Prime Minister, and the attendance of the Ministers of Planning, Finance, Communications, and Public Business Sector, as well as a group of bank presidents and private sector companies.

The consultancy agreement for the Comprehensive Health Insurance System was signed by Minister of Finance, Dr. Mohamed Maait, and Chairman of the General Authority for Comprehensive Health Insurance, while the financing agreement for Banque du Caire was signed by Mr. Tarek Fayed, the bank's Chairman. The agreements were signed on behalf of the International Finance Corporation by Mr. Sérgio Pimenta is IFC’s Regional Vice President for Africa.

Banque du Caire Financing Agreement

The Minister of International Cooperation witnessed an agreement between Banque du Caire and the International Finance Corporation, worth $100 million, including $50 million to support the development efforts of small, medium, and micro-enterprises owned by the private sector, with a focus on financing projects owned by women entrepreneurs, in addition to $50 million to finance trade under the International Finance Corporation's Global Trade Finance Program.

The Minister of International Cooperation emphasized that the agreement signed today between the International Finance Corporation and Banque du Caire is not the first of its kind, as the IFC had previously financed the first green bonds for the private sector in Egypt by providing $100 million from the International Finance Corporation, enhancing green transformation efforts and reducing emissions.

Minister Mashat added that the Ministry of International Cooperation is keen, in implementation of the presidential directives to support and empower the private sector, to strengthen relations with multilateral and bilateral development partners to explore more available financing tools for various private sector companies, providing more direct and indirect financing tools for the private sector in Egypt.

It is worth noting that during the period 2020-2023, the Egyptian private sector obtained concessional development financing, in the form of direct financing, investment contributions, technical support, and credit lines, worth $10.3 billion.

Consulting Services Agreement

Regarding the Consulting Services Agreement, the Minister of International Cooperation affirmed that signing the Consulting Services Agreement for the Comprehensive Health Insurance System enhances the measures taken with development partners to support the system in Egypt, strengthening the state's efforts to provide comprehensive healthcare services and insurance coverage for all citizens through contracting with a network of private healthcare providers.

Dr. Al-Mashat explained that efforts with development partners have succeeded in providing concessional development financing amounting to $900 million, including $400 million from the World Bank, $181.6 million from the French Development Agency, and $326.7 million from the Japanese side, within the framework of the constructive relations linking Egypt with multilateral and bilateral development partners.

And according to the agreement, the International Finance Corporation (IFC), with its accumulated experience in dealing with the private sector in over 100 countries worldwide, works on analyzing contracting systems with the private sector, conducting consultations with stakeholders, providing technical support and consultations for contracting with private healthcare providers, and providing technical support to the General Authority for Comprehensive Health Insurance, among other provisions that achieve the project's desired objectives.

The Minister of International Cooperation expressed gratitude to the IFC for its commitment to supporting the state and private sector efforts in Egypt through constructive and fruitful partnerships to support development efforts in various fields. The Minister noted that this agreement builds on a portfolio of consultations and technical support for the institution in Egypt worth $34 million in the areas of manufacturing, agriculture, public-private partnerships, green buildings, gender equality, and the financial sector.

Dr. Rania Al-Mashat, Minister of International Cooperation, participates in a high-level session titled “Public Meets Private: Unlocking Sustainable Investment in Egypt.”

Within the activities of “IFC Day in Egypt” and the high-level forum held during the activities of the visit of Mr. Sergio Pimenta, Vice President of the Foundation for the Africa Region, Dr. Rania Al-Mashat, Minister of International Cooperation and Governor of Egypt to the World Bank, participated in a discussion session entitled “Public Meets Private: Unlocking Sustainable Investment in Egypt” with the participation of Dr. Hala Al-Saeed, Minister of Planning and Economic Development, Dr. Mohamed Maait, Minister of Finance, Mr. Tarek Tawfiq, President of the American Chamber of Commerce in Egypt, and Mr. Stephane Gimbert, Regional Director For Egypt, Yemen and Djibouti at the World Bank, the session was moderated by Cheikh Omar Sylla, Regional Director of the IFC for North Africa and the Horn of Africa.

The session aimed to launch a dialogue between the government and the private sector to explore ways to unleash sustainable investment in Egypt, in light of the reforms and efforts undertaken by the government to empower the private sector and implement the state ownership policy document, in a way that advances the comprehensive economic development plan in Egypt.

The role of international financial institutions in supporting government measures to empower the private sector

In her speech, the Minister of International Cooperation stressed the importance of the role played by the private sector in achieving development, driving economic growth and creating job opportunities, and the opportunities available through partnership between the government and private sectors to benefit from the resources and accumulated expertise of the business community to meet development challenges.

The Minister explained that, in implementation of the presidential directives regarding activating the participation of the private sector, enhancing its role in development, and providing the best alternatives to bridge the financing gap, the Ministry of International Cooperation has begun establishing a working group concerned with private sector participation to benefit from the initiatives and programs implemented by development partners, to push the role of the private sector, especially in light of the efforts and measures undertaken by the government at the level of economic and structural reform to maximize the role of the private sector.

H.E. stated that the course of economic reform in Egypt was characterized by successive measures since 2014 that contributed to creating an environment conducive to private investment and focusing on equal opportunities and transparency. These measures were completed in the recent period by launching the state ownership policy document and moving forward with the implementation of the government proposals program, as well as reforms of state-owned companies to improve transparency and competitiveness in the Egyptian economy through legislative amendments that guarantee the neutrality of competition between state-owned companies and others.

Partnership between the government and private sectors

The Minister of International Cooperation touched on partnerships between the government and private sectors, stressing that they are a major tool for achieving development. To this end, the government has worked to increase the projects offered through the PPP system, and it has also launched a partnership unit between the government and private sectors to establish a long-term partnership between the two sides.

In the same context, the Minister of International Cooperation reviewed the fruitful partnership with the International Finance Corporation to encourage participation between the government and private sectors and provide investments and technical support to implement major projects in various sectors, bringing the total investments to about $9 billion, in addition to a portfolio of advisory services.

H.E. touched on the importance of the guarantees platform that will be launched by the World Bank early next July, noting that the Ministry of International Cooperation is working to introduce this platform to enhance the Egyptian market’s benefit from it in a way that expands the range of financing tools available in Egypt.

Reaping the benefits of private sector participation

Al-Mashat stated that achieving comprehensive and sustainable development and maintaining the development path amid regional and international challenges will not be possible without the significant participation of the private sector, with its great experience and ability to employ and use modern technologies to achieve the desired development, stimulate innovation and increase productivity, which is reflected in the Increase GDP.

She stressed that expanding the scope of private sector participation has a significant impact on enhancing the culture of innovation, digitization and entrepreneurship, noting in this regard that the government has taken steps to improve the environment for entrepreneurship and innovation, including launching a special unit for these companies in the Council of Ministers, noting that the Ministry of International Cooperation has also launched Hub for Advisory, Finance & Investment for Enterprises platform, which works to link financial and non-financial services available from development partners and private sector companies, whether large, medium or small, as well as emerging companies.

For her part, Planning Minister Hala El-Saeed participated in a great panel titled “Partnering for Impact: Empowering Sustainable Private Sector Development in Egypt” at the IFC Day in Egypt.

The panel discussed Egypt Vision 2030, particularly its recent update focused on developing a diversified knowledge society within a supportive and stimulating work environment.

She highlighted that the private sector is no longer just an engine of growth, but a critical partner in achieving SDGs. Forward-thinking economies are recognizing the power of innovation to tackle challenges, and this is the type of collaborative and impactful private sector engagement that will truly empower a nation’s long-term success.

She added that Egypt’s commitment to a thriving private sector is evident through its Structural Reform agenda. And today, we are proud that the private sector’s contribution to investment has already reached 40% in the current fiscal year, with an ambitious target of 50% in the next and a share of employment increased to 80%.



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