Brussels: Europe and the Arabs
A statement issued by the European Commission in Brussels on Saturday said that at the investment conference between the European Union and Egypt, which was co-organized by the European Union and the Egyptian government on June 29 and 30, it was agreed that the European Union and Egypt would cooperate to intensify private sector investments in Egypt. And also signing a memorandum of understanding to disburse up to one billion euros in total financial aid to Egypt. The European statement, a copy of which we received, explained that the investment conference and signing of the memorandum of understanding are the first tangible results of the strategic and comprehensive partnership (partnership), which the European Union and Egypt signed in March 2024, in recognition of the important geostrategic role that Egypt plays as a pillar of stability in the region.
European Commission President Ursula von der Leyen said at the opening of the investment conference: “One hundred days ago, we opened a new era in relations between Egypt and the European Union, through our strategic and comprehensive partnership. Today we deliver. We are providing Egyptian companies and entrepreneurs with total financial assistance worth one billion euros, which will stimulate the reforms that companies and entrepreneurs in the private sector need. We provide strategic investments that will help make Egypt a clean energy hub in the central Mediterranean, a crossroads. We are providing support to Egypt's youth through a new skills program so that they can succeed in the economy of the future. "And this is just the beginning."
Investment conference
The investment conference is a major platform to discuss the economic reforms Egypt is pursuing to improve the business environment and attract more European Union investments in key sectors. These reforms and investments are expected to drive the energy transition forward, in areas including renewable hydrogen production, promoting the circular economy, and strengthening the pharmaceutical, medical and automotive sectors. Investments are also directed towards sustainable agriculture, food systems and water security as well as innovation and digitalization. The investment conference brings together around 1,000 participants, including representatives of the European Union and Member States, senior Egyptian officials, international financial institutions and CEOs of European and Egyptian companies.
A large number of private investment agreements worth €40 billion are expected to be announced and signed by European and Egyptian companies at the investment conference, including in sectors such as renewable energy and hydrogen.
At the conference, the European Union and the Egyptian government signed the Sustainable Green Industry Programme. The programme, supported by a €30 million EU grant which will unlock a €271 million loan from the European Investment Bank and partner banks, will help industry in Egypt invest in pollution reduction, decarbonisation, energy and resource efficiency.
To enhance youth employment opportunities and skills, support Egypt in addressing gaps in the child protection system and enhance manufacturing capabilities and access to vaccines, medicines and health technologies, the European Union and the Egyptian government are signing three financing agreements worth €36 million. Overall, as part of bilateral cooperation programmes. A European Union support package worth €60 million to improve grain storage in Egypt within the framework of the Food and Resilience Program is also being signed during the conference.
And
The EU and Egypt also signed a financing agreement for the NEXT MED interregional cooperation programme, which aims to promote fair, equitable and sustainable development across the Mediterranean Basin, thus contributing to the EU’s Mediterranean Agenda. With an EU contribution of €263 million, NEXT MED is the largest EU-funded external cooperation program in the Mediterranean Basin. It brings together the coastal areas of 15 countries (7 EU Member States and 8 Partner States), including Egypt.
Signing a memorandum of understanding worth up to one billion euros in the field of total financial assistance
Up to €1 billion in Macro Financial Assistance (MFA) is the first of two MFA operations for Egypt that aim to provide up to €5 billion in favorable loans to Egypt. This Foreign Office support represents the vast majority of the €7.4 billion in EU financial support under the Partnership.
Microfinance operations will help meet Egypt's external financing needs. It will also support the implementation of an ambitious policy program that includes strong and immediate adjustments and structural reforms to help put the Egyptian economy on a sustainable economic path.
At the conference, a special memorandum of understanding was signed. It sets out a set of domestically relevant and critical macroeconomic reforms that are considered feasible within the short assistance horizon of this process, with funds expected to be disbursed before the end of 2024. The agreed policy action covers three pillars: enhancing macroeconomic stability, improving the business environment and strengthening Egypt's competitiveness and supporting the green transformation in Egypt.
In some cases, policy actions serve as a starting point for more ambitious and comprehensive reform efforts in the medium term, which could be considered to be on the reform agenda to be negotiated in the subsequent €4 billion MFF process, once approved by the Council and European Parliament.
Subject to progress on the reforms agreed in the Memorandum of Understanding, the corresponding amount of up to €1 billion of MFF support could be disbursed in one lump sum at the end of 2024.