Active Development AidData Chinese Aid

CDB provides RMB 7 billion loan to Central Bank of Egypt to strengthen the country’s foreign reserves and preserve macroeconomic stability (Linked to Record ID#52882, #89462, and #52881)

¥7M RMB

Funder	China Development Bank (CDB)
Recipient Organization	Central Bank of Egypt
Country	Egypt
Start Date	Oct 18, 2023
End Date	Oct 29, 2032
Duration	3,299 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`102315`

Grant Description

CDB provides RMB 7 billion loan to Central Bank of Egypt to strengthen the country’s foreign reserves and preserve macroeconomic stability On January 23, 2016, the President of China, Xi Jinping, and the Egyptian President, Abdel Fattah El-Sisi, signed a liquidity support facility (LSF) agreement wherein China Development Bank agreed to provide a $1 billion loan to the Central Bank of Egypt.

📋 Loan / Grant Terms

📅 Maturity11 years

⏳ Grace Period3 years

The purpose of the loan was to help the Central Bank of Egypt shore up the country’s foreign exchange reserves in the face of pressure on the Egyptian pound.

According to CDB, its Qingdao Branch and the CDB Cairo Representative Office organized a $900 million disbursement shortly after the LSF agreement was signed.

Reporting from the Central Bank of Egypt suggests that CDB subsequently ‘upsized’ the face value of the liquidity support facility agreement from $1 billion to $2 billion. However, the precise timing of this increase in the face value of the loan is unknown.

The Central Bank of Egypt reports that the amount outstanding under the LSF was $1.8 billion as of September 2019, $1.5 billion as of September 2020, $1.6 billion as of December 2020, $1.3 billion as of March 2021, $1.3 billion as of June 2021, $1.1 billion as of September 2021, $1.1 billion as of December 2021, $842.9 million as of March 2022, $817.8 million as of June 2022, $560.5 million as of September 2022, $567.2 million as of December 2022.

On October 18, 2023, during the Third Belt and Road Forum for International Cooperation in Beijing, China Development Bank (CDB) and the Central Bank of Egypt signed an RMB 7 billion liquidity support facility (LSF) agreement.

📋 Loan / Grant Terms

💰 Loan Amountinclude a 5-year maturity

📅 Maturity5 years

💹 Interest Rate3.7%

This new liquidity support facility effectively refinanced and replaced the previous LSF. The new loan fully disbursed on October 30, 2023.

The Central Bank of Egypt reports that the amount outstanding under the LSF was $1.1 billion in December 2023, and $963 million in June 2024.

📋 Staff Comments

The loan was characterized in Chinese media as an ‘effective supplement and expansion of the central bank’s swap agreement. It can provide the Egyptian Central Bank with more abundant RMB liquidity and help the Egyptian Central Bank manage the country’s RMB liquidity.’ 2. The Chinese project title is 埃及中央银行人民币贷款协议 or 埃及中央银行70亿元贷款项目.
The loan's borrowing terms are drawn from the World Bank's Debtor Reporting System (DRS). See https://www.dropbox.com/scl/fi/2c83d9hrtg0trrqy0evu9/Egypt-s-official-sector-PRC-borrowings-and-borrowing-terms-IDS-December-2024.xlsx?rlkey=27tra55qcihad0zoug39boufv&dl=04. The new LSF committed in October 2023 effectively refinanced and replaced the 2016 facility. Therefore, the $560 million balance in 2022 was assumed to be repaid in 2023 and replenished by the new facility.
This loan is also recorded in Boston University's Chinese Loans to Africa Database. BU has recorded the transaction amount for this loan as $988.1 million.

📚 Sources & References

ARAB REPUBLIC OF EGYPT REQUEST FOR EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY—PRESS RELEASE; AND STAFF REPORT (IMF Country Report No. 23/2)
对外投资合作国别（地区）指南埃及（2023年版）
The Governor of the Central Bank of Egypt Meets the President of China Development Bank
国家开发银行完成与埃及中央银行70亿元贷款项目全额发放工作
Central Bank of Egypt secures $956.6 mln loan from China Development Bank
国开行完成与埃及央行70亿元贷款全额发放
List of Practical Cooperation Deliverables of the Third Belt and Road Forum for International Cooperation
CBE received close to $1B in Chinese Yuan from China Development Bank
China Development Bank disbursed $957m to Egypt’s central bank
对外授信人民币是国际化的一种重要方式
External Position of the Egyptian Economy
Egypt's official sector PRC borrowings and borrowing terms IDS December 2024
List of Practical Cooperation Deliverables of the Third Belt and Road Forum for International Cooperation
第三届“一带一路”国际合作高峰论坛务实合作项目清单 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.