- OPEC Fund and AIIB partner to provide infrastructure funding in Egypt
OPEC Fund and AIIB partner to provide infrastructure funding in Egypt
A US$200 million loan agreement was signed with the National Bank of Egypt (NBE), Egypt’s largest commercial bank, to finance the development of infrastructure projects in the country
The financing package includes a US$150 million loan from the Asian Infrastructure Investment Bank (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 available for on-lending to private sector companies in priority industries that include energy (particularly renewables), health and transportation. In addition, NBE will on-lend to small- and medium-sized enterprises (SMEs).
The financing is aligned 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. The United Nations' member states have committed to implement the 17 SDGs by 2030 as a blueprint for peace and prosperity.
Tareq Alnassar, OPEC Fund Assistant Director-General of Private Sector and Trade Finance Operations, said at the signing in Abu Dhabi: “Egypt’s significant infrastructure needs can be met by increasing investments in the 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 towards on-lending to the private sector, and pleased to cooperate with AIIB in a partner country that is important to our institutions.”
Konstantin Limitovskiy, AIIB Vice President, Investment Operations (Region 2), added: “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. 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 establishment of the organization in 1976. To date, more than US$1.3 billion has been committed by the OPEC Fund to projects in various sectors of the economy.
NBE is Egypt’s oldest commercial bank and provides corporate and investment banking services, as well as traditional banking activities including services to SMEs, capital markets and asset management. NBE also funds key economic sectors including energy, electricity, gas, telecommunications, air transport and tourism.
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 members worldwide.