By Raghda Hilal
Nada Shousha, regional director for the International Finance Corporation (IFC) for Egypt, Libya, and Yemen, says conditions in Egypt have not had a significant impact upon the IFC’s financial presence in the region.
In an interview with Al Borsa, she said the IFC is prepared to grant funds to investors at any time, but stressed that the impetus for investment falls to the individual investor, not to the IFC.
According to Shousha, the IFC’s commitments in Egypt have reached US$1 billion since 2011. The IFC considers Egypt to be a priority in the region, she said, due to the country’s ability to attract major investment projects.
During the fiscal year of 2013 the IFC provided US$276 million in funding to five initiatives in Egypt. The corporation provides funds to a total of 14 separate projects around the country.
An IFC loan of US$100 million was awarded this year to natural gas company Petroceltic, complementing an earlier loan of US$400 million intended to shore up the company›s operations in Egypt and the region. The IFC also extended a US$34 million loan to energy firm TransGlobe to increase oil prospecting in Egypt and Yemen, as well as an US$11 million loan to Nile Kordsa–an industrial fabric manufacturer–and a US$56 million stimulus package for the local commercial banking industry.
The IFC further purchased US$6 million worth of Fawry, an online bill-paying service and Egypt’s premier data security pioneer, bringing the IFC to an 18 per cent stake in the company. Such initiatives are intended to broaden the IFC’s financial services in Egypt and encourage economic development throughout the region, according to Shousha.
The IFC plays a pivotal role in the provision of both technical and financial support for investment projects across Egypt, said Shousha. It does this though utilising a combination of funds and consulting, actively training local workers in technical and managerial skills through its Business Age programme, providing training in corporate governance in cooperation with the Egyptian Banking Institute, and training Egyptian youth in a variety of skills through the Egyptian Businessmen›s Association.
The IFC primarily finances projects in manufacturing, construction, and the energy sector, through which it hopes to increase foreign direct investment in Egypt and strengthen investor confidence in addition to supporting the country through its political transition by encouraging private sector growth, said Shousha.
The IFC has recently expanded its operations to include commercial finance and aims to provide financial services to the local banking industry for the coming fiscal year and beyond, said Shousha, as well as increasing investment in gas and energy firms, with a particular focus on small businesses and prospecting.
Shousha went on to say that the IFC has not been involved in financing projects focusing on public-private partnerships (PPPs) in Egypt, but is willing to finance PPPs related to infrastructure. According to Shousha, the transitional government’s tendency to inject funds into the economy has begun crowding out private investment, and, «while the IFC trusts in the private sector›s ability to create new jobs and lower the unemployment rate, but the government alone is not capable of realising these goals, governmental funds may temporarily serve to salvage the troubled economic situation in Egypt.
The IFC is confident in private enterprise as an engine of growth, according to Shousha, and hence will continue to support the private sector, hoping to meet the World Bank’s long-term goal of eliminating poverty by 2030. A desire for shared prosperity has led the IFC away from investment in large cities to focusing on provincial economies and empowering women. The IFC works to reduce poverty in over 100 countries, said Shousha, and has provided funds totaling US$15 billion worldwide over the last three years.