The European Union (EU) has got clearance to disburse €4 billion ($4.2 billion) in financial aid to Egypt to support its economic growth.
“The representatives from parliament and the Polish presidency of the council have secured a provisional agreement on providing Egypt with macro-financial assistance,” the EU said in a statement.
Egypt will have 35 years to repay the loans.
A short-term loan of up to €1 billion was disbursed at the end of 2024.
The release of the funds will be subject to Egypt’s implementation of the International Monetary Fund (IMF) programme and other policy measures to be agreed in a memorandum between the EU and the Egyptian government.
In an annual report, the EU Commission will examine the progress made, assess Cairo’s economic prospects and evaluate the loans’ impact on the economic and fiscal situation.
In March 2024, the EU agreed to a €7.4 billion funding package for Egypt. The deal consists of €5 billion in concessional loans, €1.8 billion in investments and €600 million in grants over the next three years.
The agreement is part of a wave of funding from Egypt’s international partners and multilateral lenders that the country’s finance minister, Mohamed Maait, has said is worth $20 billion.
The IMF board approved the fourth review on March 11, unlocking a disbursement of $1.2 billion in a 46-month IMF loan programme first approved in 2022 and later expanded following the outbreak of fighting in Gaza.
In the fourth review, the IMF board approved a request by Egypt to waive its primary budget surplus target. The surplus was expected to reach 4 percent of GDP in the fiscal year that will begin on July 1, 0.5 percent less than Egypt had committed to earlier in the programme.
