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Egypt's IMF accord latest in series of aid pledges Sunday's pledge follows loans and aid from, among others, the World Bank, Saudi Arabia and the US. So how close is Egypt to filling its $11bn gap in the 2011-12 fiscal year?
Egypt sealed a US$3 billion, 12 month standby finance arrangement with the IMF on Sunday, the latest in a series of aid pledges, which may pave the way for yet more donors to send assistance. Egypt has received billions of dollars of commitments to help it plug a balance of payments gap estimated at $11 billion in the 2011/12 fiscal year. The country, where the fiscal year begins on 1 July, has suffered a sharp drop in tourism and foreign investment in the wake of the social unrest that led to the ouster of former president Hosni Mubarak on 11 February. Here is a list of commitments made by or expected from international donors: INTERNATIONAL MONETARY FUND The IMF has agreed to a $3 billion, 12 month standby arrangement that its board is expected to approve in mid-July. The funds would have an interest rate of 1.5 per cent, and Egypt would begin repayment in 3-1/4 years and finish in five years. Egypt has asked for early delivery of a large portion of the funds, which will be disbursed quarterly over 12 months. WORLD BANK The World Bank plans to provide $4.5 billion over the next 24 months, including $1 billion in budget support this year and another $1 billion next year, depending on the country's political and economic reforms. The remaining $2.5 billion will be invested in development projects in Egypt, lending to support the private sector and political risk guarantees. SAUDI ARABIA Saudi Arabia has pledged $4 billion in aid, including a $1 billion deposit at the Central Bank of Egypt, $500 million in bond purchases, $500 million for general budget support and a $500 million soft loan. The aid includes $500 million in soft loans for development programmes from the Saudi Fund for Development and a grant of $200 million to be placed in the fund or in a current account to finance small and medium-sized enterprises and other projects. In addition, Saudi Arabia will extend another $750 million as a line of credit to finance Saudi exports to Egypt. QATAR Qatar has said that it is prepared to invest $5 billion to $10 billion in various projects to support Egypt's economy and create jobs, and that it may also buy Egyptian government bonds. Potential projects include a stake in a new $9 billion port near the northern entrance to the Suez Canal, a port near Malahat in the western outskirts of Alexandria and real estate ventures. Qatar said it had formed an executive committee with the Egyptian government for the new projects, and money could start flowing as soon as the documentation was finalised. UNITED STATES President Barack Obama has said the United States would relieve Egypt of up to $1 billion in debt and guarantee another $1 billion in borrowing to finance infrastructure and job creation. EUROPEAN UNION The European Union is considering providing several hundred million euros of its own aid once an IMF agreement is signed, diplomats say. EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT The European Bank for Reconstruction and Development said on 21 May it would explore how to direct funds to Egypt in the same way it supported communist states after the fall of the iron curtain more than two decades ago. Officials have said lending to Egypt could start at around 100-200 million euros ($140-$280 million). An EBRD spokesman said a team would visit in the next few weeks to identify infrastructure, agriculture and other potential projects. AFRICAN DEVELOPMENT BANK The African Development Bank is looking at providing $1 billion in financing, but it might not be able to put it in place until after a civilian government is restored after a parliamentary election scheduled for September, diplomats say.
