The World Bank has announced a US$700 million Development Policy Financing (DPF) for the Government of Egypt to support the country's transition towards increased private sector participation, enhanced macroeconomic and fiscal resilience, and a greener growth trajectory.
The initiative, titled “Generating Resilience, Opportunities, And Welfare for a Thriving Egypt” DPF, aims to address short-term economic challenges while promoting structural reforms. These reforms are intended to create an equitable environment for private sector growth, build macroeconomic and fiscal resilience, and facilitate Egypt’s green transition by scaling up renewable energy and increasing efficiency in the electricity, water, and sanitation sectors.
H.E. Dr. Rania A. Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank, stated: “The Government of Egypt is undertaking ambitious economic and structural reforms aimed at creating a more competitive, green and private sector-led economy. Through this budget support instrument, the DPF with the World Bank helps advance policy reforms on three of its top national priorities: building macro-fiscal resilience, enhancing economic competitiveness and improving the business environment, and supporting the green transition. Our longstanding partnership with the World Bank underpins the realization of Egypt’s development and reform efforts.”
This DPF is the first in a series of three operations aimed at advancing key reforms. These include strengthening governance frameworks for state-owned enterprises through establishing a legal basis for State Ownership Policy; empowering the Egyptian Competition Authority to combat non-competitive mergers and acquisitions; enhancing domestic revenue mobilization by ensuring accurate payroll tax assessments; reducing electricity distribution system losses; improving climate adaptation capacity; ensuring financial sustainability in water and sanitation sectors; scaling up renewable energy initiatives; and establishing a regulatory framework for a voluntary carbon credit market.
The newly approved DPF is part of a broader 3-year $6 billion program announced by the World Bank Group in March 2024. This program aims to stimulate private sector growth and job creation, enhance human capital outcomes, foster climate resilience, and strengthen economic management.
Stephane Guimbert, World Bank Country Director for Egypt, Yemen & Djibouti said: “Creating good, sustainable jobs and building resilience to climate change are critical for the current and future prosperity of Egypt’s citizens – especially the poor and vulnerable. Reforms supported by this operation are an important step towards a more sustainable, inclusive economy.”
Aligned with the World Bank’s Egypt Country Partnership Framework for FY2023-FY2027—which prioritizes private sector development—the new DPF also draws from recent analytical work by the World Bank Group on Egypt including the Country Private Sector Diagnostic and Country Climate Development Report. Of the $700 million allocated under this DPF initiative, $200 million is contingent upon complementary financing from development partners.
The DPF aligns with Egypt’s development priorities such as Sustainable Development Strategy Vision 2030, State Ownership Policy, National Climate Change Strategy 2050, as well as Nexus of Water Food Energy strategy.