The Egyptian government signed a final agreement with the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank group, for a one billion dollar loan to finance Egypt’s hydrocarbon and consumer goods.
Minister of Planning and International Cooperation, Fayza Aboul Naga, considered the terms of the loan favourable, as the ITFC set the interest rate at 3.25%, especially after Egypt’s creditworthiness was downgraded to a rating that recommends an interest rate between 4.25% and 4.5%.
Aboul Naga said that Egypt was able to negotiate the interest rate down from 3.75%.
The loan will help relieve pressure off Egypt’s foreign currency reserves and maintain its level, sparing the government the strain of allocating more foreign currency for its expenditures.
The agreement was signed between Aboul Naga and the CEO of the ITFC, Walid Abdel Mohsen El-Wahib, in the presence of Prime Minister Kamal Al-Ganzouri, Finance Minister Momtaz El-Said, Minister of Petroleum Abdallah Ghorab, along a number ITFC officials.
The meeting, which took place before the Al-Ganzouri’s government met with President Mohamed Morsi, is part an aid programme announced by the Islamic Development Bank to Egypt valued at USD 2.5 billion.
Dr. El-Wahib stressed that his company is eager to support the Egyptian economy through providing Islamic financing to secure Egypt’s strategic needs such as wheat and hydrocarbons.
He said that the ITFC strives to coordinate its financing programmes to achieve the optimum level economic development.
The ITFC has provided over $1.7 billion to Egyptian government institutions and private enterprises working in strategic sectors since it began operating in 2008.
In addition, the company has extended a USD 50 million loan for private sector companies that import soy, wheat,
and corn, with a part of the money allocated to subsidising feed production.
The ITFC has also provided USD 105 million for small and micro-enterprises, entrepreneurial youth projects,
especially for the development of livestock the services sector.