AFD signs €150 million loan deal with Egypt’s NBE, Banque Misr, Banque du Caire

MoneyBanksFinancial Institutions
By Yomna Yasser
AFD NBE Banque Misr Banque du Caire
The French Development Agency (AFD) signed loan and grant agreements totalling €150 million ($156.2 million) with three key Egyptian banks; the National Bank of Egypt (NBE), Banque Misr, and Banque du Caire on Thursday, November 3, 2022 ahead of the UN climate summit COP27 in Sharm El-Sheikh

The French Development Agency (AFD) announced on Saturday the signing of loan and grant agreements totalling €150 million ($156.2 million) with three key Egyptian banks; the National Bank of Egypt (NBE), Banque Misr, and Banque du Caire.

The signing ceremony took place on November 3 ahead of the UN climate summit COP27 taking place in Sharm El-Sheikh.

These loans include a €10 million grant from the European Union. The Finance in Common programmes accompanies the Egyptian financial system in its contribution to the objectives of Egypt’s 2030 Vision to achieve the Sustainable Development Goals by 2030.

The signing ceremony was held at the French Embassy in Giza in the presence of French Ambassador Marc Baréty along with Clémence Vidal De La Blache, AFD Country Director for Egypt; Sophie Vanhaeverke, Head of Cooperation at the EU delegation in Egypt. In addition, Tarek Fayed, Banque du Caire’s chairman and CEO, and representatives from Banque Misr, the NBE, Egyptian research centres, along with Egyptian government and private sector officials attended this event as well.

Baréty highlighted the key role Egyptian banks are playing to ensure the stability of the Egyptian economy and their decisive contribution to the national strategy for sustainable development.

France, through AFD, is committed to supporting the massive redirection of private sector financial flows, which will be necessary to achieve the SDGs, including but not limited to climate objectives, he added.

The Finance in Common programme is emblematic of this approach, supporting a “whole of financial systems partnership” by providing concessional financing as well as investment grants and technical cooperation, to work with banks on building up their inclusive and sustainable portfolio.

Baréty has reaffirmed the importance of the partnership between Egypt and France that aims to encourage economic growth, innovation, and job creation. All while ensuring the promotion of sustainability.  Over the past 15 years, out of the €3.1 billion committed, AFD in Egypt has committed more than €1 billion to support public banks, supporting 20.000 SMEs and 40.000 decent jobs.

Fayed said: “Banque du Caire’s leadership in the field of microfinance, which spans more than 20 years.

“This has given us a unique opportunity to continue contributing to a more sustainable financial market, where the bank has succeeded in the field of microfinance in providing about 1,300 million jobs and sustainable productive projects that serve various segments, most notably youth, and women.”

With the continuous changes the financial ecosystem is witnessing due to the impact of climate change, the need for green and sustainable financial solutions is vital for sustainable economic growth now more than ever, he added.

“Banque du Caire’s ability to tap into our experiences as leaders in the microfinance sector with previous initiatives to support women, youth and people with disabilities has put us at the forefront and given us a unique opportunity to continue contributing to a more sustainable financial market.”

“Banque du Caire is building the frameworks and forming strategic partnerships that will help us bring the most innovative green financial solutions to market and guarantee a smooth transition into a greener economy.”

 

Annex – Programme description of “Finance in common”

  • Main components
    • Three credit lines to NBE (€50 million), Banque Misr (€50 million) and Banque du Caire (EUR 40 M) aiming at the financing of investments contributing positively to reaching the SDGs (including an objective of 30 percent of projects showing a climate co-benefit);
    • A premium scheme up to €10 million maximum (grant from the EU) aiming at encouraging the MSMEs to offer investments with strong positive impacts on gender and/or climate. In an innovative way, the premium scheme could also support the MSMEs in implementing action plans to improve their internal practices on gender and/or climate.
    • A programme of technical assistance for an amount of €3.25 million (grant from the EU) managed directly by AFD with the following expected scope of activities:
      • Accompanying the internal transformation of partner banks in the fields of sustainable development, management of environmental and social risks, and integration of climate risks;
      • Supporting the construction of pipelines of eligible investments and the integration of structural gender and/or climate changes to the benefit of the end-beneficiaries that are MSMEs;

 

  • The main results expected

It is expected that the Egyptian financial system, including the three largest banks of the country, will integrate more significantly the principles of sustainable finance and will improve its capacities to contribute to Vision 2030. Thanks to the support of technical assistance, the funded investments will target essential thematics with the objective of reaching the SDGs in Egypt. Moreover, it is also expected that the banks will be in a better position to monitor and evaluate the impacts of their financing on sustainable development.

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