Egypt, Elsewedy review progress on Ain Sokhna phosphate complex    US employment cost index 3.6% up in year to June 2025    Egypt welcomes Canada, Malta's decision to recognise Palestinian state    Pakistan says successfully concluded 'landmark trade deal' with US    Sterling set for sharpest monthly drop since 2022    Egypt, Brazil sign deal to boost pharmaceutical cooperation    Modon Holding posts AED 2.1bn net profit in H1 2025    Egypt's Electricity Ministry says new power cable for Giza area operational    Egypt's Al-Sisi, Italian defence minister discuss Gaza, security cooperation    Egypt's FM discusses Gaza, Nile dam with US senators    Aid airdrops intensify as famine deepens in Gaza amid mounting international criticism    Egypt exports first high-tech potato seeds to Uzbekistan after opening market    Health minister showcases AI's impact on healthcare at Huawei Cloud Summit    On anti-trafficking day, Egypt's PM calls fight a 'moral and humanitarian duty'    Egypt strengthens healthcare partnerships to enhance maternity, multiple sclerosis, and stroke care    Egypt keeps Gaza aid flowing, total tops 533,000 tons: minister    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Culture minister launches national plan to revive film industry, modernise cinematic assets    I won't trade my identity to please market: Douzi    Sisi sends letter to Nigerian president affirming strategic ties    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Egypt's government adopts holistic approach to reform the energy sector: AfDB
AfDB hopes reducing energy subsidies in Egypt to 3.3% in FY2016
Published in Daily News Egypt on 21 - 01 - 2016

Daily News Egypt interviewed Leila Mokaddem Resident Representative Egypt Field Office at African Development Bank (AfDB) to talk about the bank's business in 2016 and its vision regarding the economic reforms taken by the Egyptian government.

Has AfDB instituted new conditions that the Egyptian government must meet to acquire loans in 2016?
AfDB has a privileged partnership with the Government of Egypt (GoE), its second largest regional shareholder and third client in terms of cumulative historical approvals. However after a lending hiatus of several years, the bank is now able to fully reengage with Egypt.
Nonetheless the bank needs to carefully manage the issue of headroom. This calls for a new reengagement format through which the Bank should seek to increase its exposure to non-sovereign operations and mobilise additional resources through trust funds, The Africa Growing together fund, the Clean energy funds, and through co-financing with other partners.

Besides the loan for the budget, will AfDB finance any other development projects?
Specific indicative lending projects for 2016 in the bank's Country Strategy Paper (CSP) include the lining of the Nubaria and Ismailia Canals, the construction of a 200 MW wind farm in Gulf of Suez (private sector project), and the construction of the Damanhour power plant. Additionally, AfDB will finance three private sector projects, two of which are in the renewable energy sector and Economic Governance and Energy Support Programme.

Moreover, specific indicative grants for 2016 in the bank's CSP include transport sector interconnectivity in Egypt, institutional support to GAFI to set up a centre of excellence to promote intra-Africa trade, a feasibility study, and the ESIA Abou Rawash Sludge facility. AfdB will also fund a study on best practices on skills development and provide a supplementary grant for the National Drainage Project


What are the details of the partnership agreement between the bank and Egypt?
Specifically, during the recently approved 2015 19 Country Strategy Paper (CSP), which highlights the core priority areas of AfDB in the coming years, will be focusing on two operational pillars. First is infrastructure (for private sector competitiveness and sustainable and inclusive growth); and governance (for enhanced transparency, efficiency and fairness and increased private sector participation). This will be implemented through public and private sector loans, programme based operations (budget support), grants and economic and sector work (ESW).

What is your vision regarding energy subsidies and tax system in Egypt in 2016?
To boost growth and reduce the subsidy bill, the GoE adopted a holistic approach to reform the energy sector, which has been a drag on the economy. The Government's comprehensive plan focuses on energy pricing, subsidy reforms, regulatory and changes within governance of the energy, oil and gas sectors. The GoE is using savings from the energy subsidy reform to launch targeted social safety nets to shield the neediest from the adverse effects of these reforms.
Based on the above, we are hopeful that there will be a reduction of energy subsidies as a proportion of GDP from 6.6% in FY2014 to 3.3% in FY2016. The target for FY2018 will be confirmed during subsequent policy and lending discussions, and economic performance.
Regarding the tax system, the GoE and bank are keen to increase tax revenues as one of the key measures to help address the fiscal deficit along with expenditure management. Tax revenues in FY2015/2016 registered a 33% increase than what was expected in FY2014/2015. The most important tax reforms expected in FY2015/2016 include a shift to the VAT system, which should yield extra revenues. The bank will continue to support the GoE wherever necessary to strengthen the fiscal position, including through ESW Studies.

What are the economic promises made by the Egyptian government to the bank?
Through the Economic Governance and Energy program, which is planned for three fiscal years (2015/2016 – 2017/2018), the AfDB will support the government in its reform efforts which are aimed at advancing fiscal consolidation through revenue enhancement measures, and measures to contain the wage bill. Besides, ensuring energy security through improved governance in power and gas sectors, reforms of subsidies and enhancing the business environment by improving the environment for investment and industrial growth. Further, fostering open competition, transparency, good regulatory governance, and financial inclusion will be important.


What is the bank's role in PPP projects?
The bank has so far provided support to PPPs in the form of studies, which it did, for example, with the Helwan wastewater treatment plant. It has also helped to set up a regional hub for PPPs in North Africa to provide technical support to the government.. By the end of October 2015, the GoE had tendered 5 PPP projects out of 7 planned in 2015 and 2 were expected to be tendered before the end of the year.

Bank support from the private-sector window will complement its support from the public-sector window. The Bank could also consider support to PPPs in large infrastructure projects as well as private companies. Advisory services could be provided through the AfDB PPP North Africa Hub.


Clic here to read the story from its source.