Egypt signed a deal earlier this year for a $2 billion central bank deposit from Saudi Arabia, International Cooperation Minister Sahar Nasr announced Thursday.
Egypt inked a raft of agreements with Saudi Arabia during a visit by the Saudi king in April, including plans for a 60 billion Saudi riyal ($16 billion) investment fund.
Nasr said the $2 billion deposit deal was also signed during King Salman’s visit. The deal had not been previously announced.
Egypt is scrambling to secure some $5 billion to $6 billion in bilateral financing needed to ensure that a $12 billion lending programme agreed with the International Monetary Fund last week will go ahead.
Nasr did not say when the Saudi deposit was expected to arrive and it was not clear whether it would be counted toward the financing of Egypt’s programme. “This is old money. I don’t know if they count that,” she said by text message.
Egypt, struggling to rebuild an economy battered by turmoil since a 2011 uprising, won staff-level agreement for the three-year IMF lending programme last week.
But IMF Egypt Mission Chief Chris Jarvis told Reuters that Egypt’s programme would require additional financing in the first year, including assurances of $5 billion-$6 billion in bilateral support, before he could take it to the board.
The Arab world’s most populous state has already secured pledges from the United Arab Emirates for a $4 billion aid programme that would include a $2 billion central bank deposit and a development loan.
Egypt had also announced in May cabinet approval for a Saudi grant of $2.5 billion to be paid in tranches. The first $500 million tranche has already been disbursed.
Nasr said the $2 billion central bank deposit was part of a separate deal though both were signed during the king’s visit.
Previously pledged Gulf Arab aid could form part of the bilateral financing but the IMF needs assurances that the money will arrive in the first year of the programme, Jarvis told Reuters last week. He said then that the IMF would support Egypt’s effort to secure the financing it needs.
Armed with an IMF-approved reform agenda, the government has said it will go to international markets with a eurobond issuance of $3 billion to $5 billion as early as September.
The Finance Ministry said in a statement on Thursday Egypt had asked JPMorgan, Citi, BNP Paribas and Natixis to lead manage its international bond offer.