The Egyptian government will receive the third portion—worth $1bn—of the World Bank loan before the end of this month, an official source at the Ministry of Finance said.
According to the source, who asked not to be named, the World Bank’s board of directors will hold a meeting this week to discuss the approval to grant Egypt the third tranche of the agreed loan in advance.
The Egyptian government announced, in December last year, the signing of an agreement with the African Development Bank (AFDB) to obtain $500m, which is the value of the second part of the loan extended by the bank to Egypt over the course of three years. The bank delivered the first tranche in September last year, while the second was disbursed in March this year.
According to the source, the government intends to pay part of the arrears to foreign oil companies through the third tranche of the World Bank loan, as the government intends to pay around $750m to these companies.
Minister of Petroleum and Mineral Resources Tarek El-Mulla said, in previous remarks, that Egypt intends to pay $750m of foreign oil companies’ arrears in December.
He had noted that the dues of foreign partners in June amounted to $2.3bn, which is the lowest since 2013.
According to a report issued by the International Monetary Fund (IMF)—the first review of the Egyptian economic reform programme—the government is expected to pay $1.2bn as the first batch of dues to foreign partners. The IMF reduced the amount of payments due to foreign partners during the next fiscal year to $800m, down from $1.1bn. This means that Egypt will complete repayment of foreign dues before the end of June 2019.The Egyptian government was expected to pay about $400m to foreign partners before the end of December 2017, while it will actually pay $1bn, exceeding expectations made by IMF.