Asian Infrastructure Investment Bank (AIIB) Vice President for Policy and Strategy Sir Danny Alexander attended a signing ceremony in the United Arab Emirates to mark the completion of a loan transaction with Egypt’s largest commercial bank, National Bank of Egypt (NBE).
Under the loan facility, AIIB and the OPEC Fund for International Development (OPEC Fund) will provide $200 million in funding to help NBE offer loans to the infrastructure sector. The loans will support the Government of Egypt’s efforts to enhance the growth of investments across various infrastructure sectors in the market.
This is AIIB’s first nonregional syndication transaction in the financial institutions sector and NBE’s first on-lending project directed to the infrastructure sector. AIIB will support NBE with its ongoing efforts to enhance its sustainability initiatives.
“This is AIIB’s first engagement with an Egyptian bank and the project will help NBE diversify its funding sources for lending to the infrastructure sector,” said AIIB Vice President, Investment Operations (Region 2) Konstantin Limitovskiy. “It is fully aligned with AIIB’s thematic priority to advance sustainable infrastructure and, in partnership with the OPEC Fund, will support the Government of Egypt’s intention to bridge the maturity gap between the demand for longer-term loans and the availability of short-term deposits in the Egyptian financial system.”
Hesham Elsafty, NBE’s Group Head, Financial Institutions and International Financial Services, said the infrastructure sector is of great importance to Egypt and its economy.
“With the USD200 million in funding from AIIB and the OPEC Fund, NBE will be in a position to expand its existing funding to this crucial sector, hence improving services offered to Egyptian corporates and making a wider impact on the economy as a whole,” said Elsafty.
Tareq Alnassar, OPEC Fund Assistant Director-General—Private Sector and Trade Finance Operations, signed the agreement on behalf of the OPEC Fund in Abu Dhabi. The signing took place during AIIB’s Sixth Annual Meeting of the Board of Governors. With the theme “Investing Today, Transforming Tomorrow,” AIIB’s 2021 Annual Meeting is being held virtually on Oct. 26-28, 2021.
“Egypt’s significant infrastructure needs can be met by increasing investments in both public and private sectors, and banks such as NBE will play a critical role in deploying funding where it is most needed,” said Alnassar. “We are delighted to support NBE’s efforts for on-lending to the private sector and pleased to cooperate for the first time directly with AIIB in a partner country that is important to our institutions. Our loan aligns well with several
Sustainable Development Goals (SDGs), such as SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure).”
The Egyptian government is rebuilding almost the entire infrastructure of the country which requires billions of U.S. dollars. The government’s budget as well as that of Egyptian banks cannot cover the costs of such giant projects. AIIB will play a major role in rebuilding Egypt’s infrastructure since it facilitates the procedures of getting loans. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, the bank is meant to better connect people, services, and markets that over time will impact the lives of billions and build a better future.
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