The African Development Bank (AfDB) announced on Wednesday that it would provide Egypt with a $2.5 billion loan to help fund its budget deficit, bolster the national economy and finance specific development projects. "Egypt will receive $500 million, representing the first tranche of the African Development Bank's loan, by the end of December," Samy Zaghloul, AfDB's executive director for Djibouti and Egypt, said at a Wednesday press conference. "The first tranche will be specifically channeled to fund Egypt's widening budget deficit. This is the agreement we signed with the Egyptian government, and I assure that the loan package is not tied to any conditionality," added Zaghloul. Egypt will receive the remaining tranches by the end of 2013, which will go towards investment in infrastructure, including the expansion of the Sharm Al-Sheikh International Airport, development of new electricity networks and promotion of renewable energy. "The Egyptian economy is facing a significant impediment to its growth, including the absence of viable infrastructure, especially in the energy sector," said AfDB Vice-President and chief economist Mthuli Ncube. "That is why the bank is determined to channel the loan – to help create strong and reliable infrastructure that will boost economic recovery," explained Ncube. The bank is currently helping the Egyptian Electricity Holding Company in the construction of the Kureimat power plant near Cairo. Part of the second loan tranche will be specifically allocated to the Kureimat project. Egypt is set to receive a $4.8 billion loan from the International Monetary Fund following an IMF staff meeting on December 19. The loan is aimed at boosting economic performance and investor confidence in Egypt.
