WASHINGTON, June 24, 2024 - The World Bank has announced US$700 million in Development Policy Financing (DPF) for the Government of Egypt to support the country to shift toward more private sector participation, better macroeconomic and fiscal resilience, and a greener growth trajectory.
The "Generating Resilience, Opportunities, And Welfare for a Thriving Egypt" DPF is designed to help Egypt address short-term economic challenges while advancing the next generation of structural reforms to level the playing field to unleash private sector growth; build macroeconomic and fiscal resilience; and facilitate Egypt's green transition, including by scaling up renewable energy and increasing efficiency in the electricity, water and sanitation sectors.
Minister of International Cooperation and Governor of Egypt at the World Bank H.E. Dr. Rania A. Al-Mashat said: "The Government of Egypt is undertaking ambitious economic and structural reforms aimed at creating a more competitive, green and private sector-led economy. Through this budget support instrument, the DPF with the World Bank helps advance policy reforms on three of its top national priorities: building macro-fiscal resilience, enhancing economic competitiveness and improving the business environment, and supporting the green transition. Our longstanding partnership with the World Bank underpins the realization of Egypt's development and reform efforts."
The DPF is the first in a programmatic series of three operations. It will help advance key reforms, including: strengthening the governance framework for state-owned enterprises through the creation of a legal basis for the State Ownership Policy; empowerment of the Egyptian Competition Authority in combatting non-competitive mergers and acquisitions; enhancing domestic revenue mobilization by ensuring the accurate assessment of payroll taxes; reducing electricity distribution system losses; improving capacity for climate adaptation and the financial sustainability of the water and sanitation sectors; scaling up renewable energy; and establishment of a voluntary carbon credit market regulatory framework.
The newly approved DPF is part of the World Bank Group's intended 3-year $6 billion program of support for Egypt announced in March 2024 to help spur private sector growth and job creation, enhance human capital outcomes, foster climate resilience, and strengthen economic management.
"Creating good, sustainable jobs and building resilience to climate change are critical for the current and future prosperity of Egypt's citizens - especially the poor and vulnerable," said Stephane Guimbert, World Bank Country Director for Egypt, Yemen & Djibouti. "Reforms supported by this operation are an important step towards a more sustainable, inclusive economy."
The new DPF is aligned with the World Bank's Egypt Country Partnership Framework for FY2023-FY2027, which prioritizes private sector development, and is informed by recent World Bank Group analytical work on Egypt, including the Country Private Sector Diagnostic and the Country Climate and Development Report. Of the $700 million in the current DPF, $200 million is contingent on complementary financing from development partners.
The DPF aligns with Egypt's development priorities and national strategies, including the Sustainable Development Strategy Vision 2030, the State Ownership Policy, the National Climate Change Strategy 2050, and the Nexus of Water Food and Energy.
