Egypt has signed Tuesday €320 million worth of two memoranda of understanding with the European Bank for Reconstruction and Development (EBRD) to support the country’s transport and water sectors.
Under the first MoU, the EBRD will contribute to the rehabilitation of the Heliopolis tram link between the Ramsis and Almaza areas in Cairo with the overall cost estimated to be US$500 million.
The EBRD expects to provide an investment package of €220 million (US$250 million) divided in two tranches. A sovereign loan of up to US$125 million would finance infrastructure works to be implemented by the National Authority for Tunnels.
The second tranche is a loan of up to US$125 million potentially to a private company for the procurement of rolling stock and for the operation and maintenance of the fleet.
“The Heliopolis Tram Project is a continuation of the EBRD’s engagement in the development of Cairo’s urban transport system and forms part of the Bank’s wider integrated approach for the sector, which focuses on the lack of integration of transport modes in the capital.” EBRD said in a Tuesday statement.
In preparation, the bank has mobilised grant funds from the EBRD Infrastructure Project Preparation Facility (IPPF) to fund the feasibility study and conceptual design of the project. In addition, the bank will seek to mobilise grant funds to be used for the implementation of the project.
The second MoU is the European lender’s first formal engagement in developing a water irrigation system. EBRD will participate by €100 million in a programme developed by Egypt’s Ministry of Water Resources and Irrigation for the modernisation of the irrigation system to increase the efficiency and quality of services.
Investing in the development of water quality management and the implementation of modern irrigation is part of the bank’s Green Economy Transition approach. The EBRD’s financing will help improve climate resilience and the efficient use of water and energy in the agribusiness sector, which consumes over 86 percent of total water resources in Egypt.
In line with Egypt’s National Water Resource Plan and MWRI’s Joint Irrigation Sector Approach (JISA), the bank will promote the transition from a centrally managed system to one that is community-based by increasing the farmer’s operational responsibilities.
The investments will be complemented by considerable technical assistance for project preparation and implementation.
Egypt’s Minister of International Cooperation Sahar Nasr, who is heading her country’s delegation to attend EBRD’s 25th Annual Meeting, has signed the MoUs with EBRD President Suma Chakrabarti at the bank’s headquarters in London on Tuesday.
The EBRD will hold its 25th Annual Meeting and Business Forum in London on 11-12 May, an opportunity to reflect on the remarkable progress that the emerging economies in its regions have achieved over the last quarter of a century.
The EBRD is celebrating the 25th anniversary of its creation in 1991 to help foster the transition to market economies, initially in post-communist states.
During the signing of the MoU, EBRD President Chakrabarti said: “We are very pleased to contribute to these two crucial sectors and to make a positive difference in people’s lives. These projects will enhance the quality of services and the engagement of the private sector. This partnership will help to create a better environment for reforms in the water and energy sectors that will improve productivity.”
Minister Nasr said: “These two projects are of vital importance to the development of the urban transport and irrigation sectors in Egypt. They will provide improved services to the Egyptian public and increase the quality of our institutions to manage operations, ensuring long term sustainability. MOIC are pleased that the EBRD has consolidated its commitment to the urban transport sector in Cairo and is also demonstrating flexibility by engaging in new sectors such as irrigation.”
The EBRD has invested over €1.7 billion in Egypt through 34 projects since the start of its activities in the country at the end of 2012. The bank’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater and contributions to the upgrade of transport services.