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OPEC Fund and Asian Infrastructure Investment Bank (AIIB) partner up to provide infrastructure funding in Egypt
(from left) Sir Danny Alexander, AIIB Vice President for Policy and Strategy; Hesham Elsafty, Group Head, Financial Institutions & International Financial Services at the National Bank of Egypt; Tareq Alnassar, Assistant Director-General, Private Sector and Trade Finance Operations, OPEC Fund.
October 28, 2021: The OPEC Fund for International Development and Asian Infrastructure Investment Bank (AIIB) have signed a US$200 million loan agreement with the National Bank of Egypt (NBE), Egypt’s largest commercial bank, to support the bank’s on-lending to hard and soft infrastructure sub-projects.
The financing package includes a US$150 million loan from AIIB and a US$50 million loan from the OPEC Fund, and will help bridge the infrastructure funding gap in Egypt, leveraging NBE’s broad network in the country. The OPEC Fund’s loan will be used for on-lending to the private sector in priority industries that include education, energy (particularly renewables), health and transportation. In addition, NBE will on-lend to small- and medium-sized enterprises (SMEs).
Tareq Alnassar, OPEC Fund Assistant Director General- Private Sector and Trade Finance Operations, signed the agreement on behalf of the OPEC Fund in Abu Dhabi. Alnassar said: “Egypt’s significant infrastructure needs can be met by increasing investments in both public and private sectors, and banks such as NBE will play a critical role in deploying funding where it is most needed. We are delighted to support NBE’s efforts for on-lending to the private sector, and pleased to cooperate with AIIB in a partner country that is important to our two institutions. Our loan aligns well with several Sustainable Development Goals (SDGs), such as SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation and Infrastructure).”
“This is AIIB’s first engagement with an Egyptian bank and the project will help NBE diversify its funding sources for lending to the infrastructure sector,” said AIIB Vice President, Investment Operations (Region 2) Konstantin Limitovskiy. “It is fully aligned with AIIB’s thematic priority to advance sustainable infrastructure and, in partnership with the OPEC Fund, will support the Government of Egypt’s intention to bridge the maturity gap between the demand for longer-term loans and the availability of short-term deposits in the Egyptian financial system.”
The OPEC Fund has supported development in Egypt since the organization was established in 1976. Since then, more than US$1.3 billion has been committed across all the OPEC Fund’s financing windows for projects in various economic sectors.
NBE is Egypt’s oldest commercial bank and provides corporate and investment banking services, and traditional banking activities including services to SMEs, capital markets and retail and asset management. NBE also funds key economic sectors including energy, electricity, gas, telecommunications, air transport and tourism.
About the OPEC Fund
The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education. To date, the OPEC Fund has committed more than US$22 billion to development projects in over 125 countries with an estimated total project cost of US$187 billion. Our vision is a world where sustainable development is a reality for all.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. AIIB began operations in Beijing in January 2016 and has since grown to 103 approved members worldwide. AIIB is capitalized at US$100 billion and Triple-A-rated by the major international credit rating agencies. Working with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.