Egypt turns to World Bank, EU for financial support

Egypt’s increasingly tenuous relationship with its largest donor, the United States, has led the government to seek assistance from others.

On Thursday (Feb. 2), the World Bank announced it has received a loan request from Egypt amounting to $1 billion, which will be used for economic programs. Inger Andersen, World Bank vice president for the Middle East and North Africa, said discussions are now under way to work out the loan’s “details.”

Meanwhile, Egyptian Finance Minister Momtaz al-Saeed said the European Union is already preparing an aid package worth $650 million to boost the struggling Egyptian economy. The announcement came after al-Saeed met with EU Ambassador to Cairo Marco Franco on Wednesday (Feb. 1). It is not known, however, if the assistance will come in the form of grants or loans.

The assistance is crucial to Egypt, which is facing financial difficulties following unrest that led to the ouster of Hosni Mubarak. Delayed delivery of donor pledges is exacerbated by the escalating tension between the government and the United States over NGO raids in December and the recent travel ban on Americans, including U.S. Transportation Secretary Ray LaHood’s son, Sam LaHood.

Just this January, Egypt resumed talks with the International Monetary Fund over a $3.2 billion loan it rejected in June. An IMF delegation is expected to return to Cairo weeks from now to finalize the agreement.

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About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.