CAIRO: Egypt and Saudi Arabia announced on Friday that the Gulf Kingdom had approved at $430 million aid package to Egypt, which is struggling with its line of credit. The package also includes a $750 million line of credit to import oil products as Egypt faces fuel shortages across the country. The aid money is to be delivered via the Saudi Fund for Development and is part of an overall agreement between Riyadh and Cairo announced shortly after the uprising in Egypt ousted former President Hosni Mubarak. Egypt has been in need of aid to cover its ballooning budget deficit and the money should help move the country forward economically. According to economists, Egypt's main source of funding, foreign investment and tourism, has declined dramatically since the uprising as a result of ongoing violence and protests in the country. They argue Cairo will need a minimum of $11 billion over the next year in order to avoid a payments crisis. The Egyptian pound is also under threat of losing ground against the dollar. Saudi Arabia earlier this month transferred a separate $1.5 billion to Cairo as direct budget support. The new aid will finance three projects in Egypt worth $230 million, Ambassador Ahmed Kattan said in a statement emailed by the Saudi embassy in Cairo. It includes $60 million to supply drinking water to the Cairo district of Nasr City, $80 million to renew and replace irrigation pumps and $90 million to build seed storage silos. The fund will also place $200 million in revolving credit in a bank account to help Egyptian small- and medium-sized enterprises, the statement said. Another $750 million line of credit to finance Saudi exports to Egypt will be exempted from a requirement that it be used to buy non-oil products. “Egypt has been exempted from importing $750 million worth of non-oil products from Saudi Arabia … based on the severe oil-products shortage faced by Egypt,” Kattan said in the statement. “Oil will continue being exported to Egypt in batches as soon as possible.” Saudi Arabia deposited $1 billion in Egypt's central bank on June 2 and transferred $500 million to buy Egyptian T-bonds on June 4, Egyptian Finance Minister Mumtaz al-Saeed said this week.
