Active Development AidData Chinese Aid

CDB upsizes liquidity support facility by RMB 7 billion to strengthen the country’s foreign reserves and preserve macroeconomic stability (Linked to Record ID#52882 and ID#52881)

¥7M RMB

Funder	China Development Bank (CDB)
Recipient Organization	Central Bank of Egypt
Country	Egypt
Start Date	Jan 01, 2018
End Date	Feb 19, 2027
Duration	3,336 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`89462`

Grant Description

CDB upsizes liquidity support facility by RMB 7 billion 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 $1 billion (RMB 7 billion) 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 in September 2019, $1.5 billion in September 2020, $1.6 billion in December 2020, $1.3 billion in March 2021, $1.3 billion in June 2021, $1.1 billion in September 2021, $1.1 billion in December 2021, $842.9 million in March 2022, $817.8 million in June 2022, $560.5 million as of September 2022, $567.2 million in December 2022, and $1.1 billion in December 2023.

Then, 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 LSF agreement (as captured via Record ID#102315).

📋 Loan / Grant Terms

💰 Loan Amountare unknown

However, it is known that the proceeds of the loan were to be used by the borrower to increase RMB liquidity and shore up the country’s foreign exchange reserves. The loan fully disbursed on October 30, 2023.

📋 Staff Comments

The Chinese project title is 埃及中央银行境外人民币授信项目.
According to an official source (http://qdsq.qingdao.gov.cn/n15752132/upload/dzzz/qdnj/2019/files/basic-html/page312.html), the Qingdao Branch of CDB provided an RMB 7 billion (approximately $1 billion) loan to the Central Bank of Egypt in 2018: “场委员会工作机制，制定风险提示， 2018 年，国家开发银行青岛市分行实现埃及中央银行 70 亿元境外人民. For the time being, AidData has coded the commitment year for the $1 billion LSF upsizing as 2018. However, it is unclear if the original LSF agreement in 2016 was also denominated in RMB. This issue merits further investigation.
For the time being, AidData assumes that the same borrowing terms (11-year maturity, 3-year grace period, 4.7352% interest rate) that applied to the 2016 LSF agreement (captured via Record ID#52881) also applied to the 2018 loan. This issue merits further investigation.
The amounts outstanding under the LSF that are reported by the borrower likely include the $1 billion loan in 2016 and the RMB 8 billion 'upsizing' of the loan (埃及央行70亿人民币授信项目) in 2018.

📚 Sources & References

External Position of the Egyptian Economy: July/December 2020/2021
Volume No. (72)
External Position of the Egyptian Economy-july september 2019/2020, eip.gov.eg/IDSC/Upload/Publication/FullFile_A/4981
Page 312 - 青岛年鉴2019, 2018年度上海金融创新奖拟奖励项目公示
THE REPORT ON SHANGHAI BANKING INNOVATION(2018)
青岛银行业概况
Jiazhen Feng - professional detals
上海市人民政府关于表彰2018年度上海金融创新奖获奖项目的决定
Page 312 - Qingdao Y earbook 2019
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Central Bank of Egypt External Position of the Egyptian Economy July/December 2022/2023 Volume No. (80)
External Position of the Egyptian Economy 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.