Sunday May 26th, 2024
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USD 20 Billion Second Tranche From Ras El Hekma Project Due End of May

50% of international currency offerings have been allocated to reducing Egypt’s external debt.

Cairo Scene

USD 20 Billion Second Tranche From Ras El Hekma Project Due End of May

The second tranche of funds from the UAE’s Ras El Hekma project, worth USD 20 billion, is set to be transferred by the end of May, part of the total USD 35 billion deal between the Egyptian government and the UAE’s sovereign wealth fund (Abu Dhabi Development Holding Company). The incoming funds are part of a large raft of foreign currency destined for the country from various international institutions, including the World Bank and the International Monetary Fund (IMF).

The total contributions from these institutions include USD 1 billion from the World Bank, USD 1.07 billion from the European Union, and USD 820 million from the IMF, all due by the end of June 2024. 50% of the proceeds from these offerings have been allocated to reducing external debt, with Egypt’s debt ratio projected to reach 88% by the end of this financial year.

The landmark Ras El Hekma deal - the largest Foreign Direct Investment (FDI) in the country’s history - injected the Egyptian economy with enough hard foreign currency to begin shoring up its fragile economy in February 2024, increasing confidence from other international institutions. The International Monetary Fund, World Bank and the European Union have since pledged significant sums in loans and grants, helping to stabilise the country’s financial situation since the floatation of the currency in March.