The Asian Infrastructure Investment Bank (AIIB) and the OPEC Fund for International Development (OPEC Fund) have lent USD 200 million to Egypt’s largest commercial bank, National Bank of Egypt (NBE), according to an official statement.
The loan is aimed at helping NBE fund infrastructure projects in Egypt, and bridge the infrastructure funding gap.
NBE offers corporate and investment banking services, as well as traditional banking activities. These include SME-focused financial services, as well as services to capital markets, and retail and asset management. NBE also provides financial backing to key economic sectors in Egypt, such as energy, electricity, gas, telecommunications, air transport and tourism, the statement said.
AIIB contributed USD 150 million to the loan facility for infrastructure projects in Egypt, while the remaining USD 50 million came in from the OPEC Fund, the statement noted.
The funding will be used to provide financial backing to hard and soft infrastructure sub-projects in Egypt.
More specifically, the loan will be deployed in the private sector across education, energy (especially renewables), health and transportation, it continued. It will also be used to on-lend to SMEs.
THE NEEDS OF INFRASTRUCTURE PROJECTS IN EGYPT CAN BE MET THROUGH PUBLIC AND PRIVATE FUNDING
This marks the first non-regional financial institutions-focused syndication transaction by AIIB, as well as the first on-lending project for infrastructure by the NBE, reports said.
“This is AIIB’s first engagement with an Egyptian bank and the project will help NBE diversify its funding sources for lending to the infrastructure sector,” AIIB Vice President, Investment Operations (Region 2) Konstantin Limitovskiy said in the statement.
“It is fully aligned with AIIB’s thematic priority to advance sustainable infrastructure and, in partnership with the OPEC Fund, will support the Government of Egypt’s intention to bridge the maturity gap between the demand for longer-term loans and the availability of short-term deposits in the Egyptian financial system,” also said Limitovskiy.
AIIB is a multilateral development bank with a capitalisation of USD 100 billion. Meanwhile, the OPEC Fund is a globally mandated development institution that has been supporting development efforts in Egypt since its establishment in 1976. So far, the OPEC Fund has provided funding of over USD 1.3 billion for projects in various economic sectors.
“Egypt’s significant infrastructure needs can be met by increasing investments in both public and private sectors, and banks such as NBE will play a critical role in deploying funding where it is most needed,” Tareq Alnassar, OPEC Fund Assistant Director General—Private Sector and Trade Finance Operations, said
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