African Development Bank to approve Egypt’s $1 billion loan request

The African Development Bank (ADB) is on its way to approve a request to grant Egypt $1 billion loan to support the country’s budget, the bank’s director said during a press conference in Cairo on Wednesday.

Sami Zaghloul, who is also Egypt’s representative in the bank’s board, said the loan request will be approved during ADB’s meeting on December 19.

The loan will spent in two phases, Zaghloul said. The first $500 million will be spent as soon as the loan is approved before the end of 2012, while the remaining will be disbursed in 2013.

In the next two years, ADB is expected to grant Egypt a total of $2.5 billion in loans, the director said. Apart from the $1 billion loan to support Egypt’s budget, ADB will loan Egypt $1.5 to finance its investment projects.

Sharm el-Sheikh International Airport, energy projects in Aswan, in addition to electric power sector funds are among the investment projects that will be financed with ADB’s loaned money, he said.

Egypt is also expected to get $4.8 billion loan from the International Monetary Fund (IMF).

Egypt’s economy has been marred by political instability.

The IMF said that the funding, provisionally agreed on November 20, would also hinge on whether other bilateral lenders stick to their loan promises after President Mohamed Mursi issued a decree that granted himself sweeping powers.