Exchange of Notes concerning a Yen Loan and Two Grant Aid projects for the Arab Republic of Egypt

  On December 17, in Tokyo, H.E. Mr. Fujii Hisayuki, State Minister for Foreign Affairs, and H.E. Dr. Rania Al Mashat, Minister of Planning, Economic Development, and International Cooperation of the Arab Republic of Egypt, signed and exchanged notes concerning the following agreements: a yen loan of up to 35 billion yen for private sector development and economic diversification support, a grant aid of up to 500 million yen for the provision of equipment related to the digitalization of agricultural machinery loan centers, and a cultural grant aid of up to 180 million yen for the procurement of equipment (such as hall seating) for the National Cultural Center.
 
1.  Development Policy Loan for the Private Sector Development and Economic Diversification Support
　(Loan Amount: Up to 35 billion Yen (approx. USD 230Mil))

(1) Overview of the Project
  Egypt is facing significant challenges due to the unstable regional situation, including the Sudan conflict and the deterioration of situations in Gaza. This loan aims to address the country’s economic and fiscal difficulties by providing financial support to the Egyptian government while promoting private sector investment, economic diversification, and the transition to a green economy. It is expected to contribute to both Egypt’s stability and broader regional stability.
  Furthermore, this project represents the realization of the financial assistance announced by then Prime Minister Kishida Fumio to H.E. President El-Sisi during the Japan-Egypt Summit Working Dinner in December of last year. The loan is co-financed with the African Development Bank (AfDB) and contributes to the fifth phase of the Enhanced Private Sector Assistance (EPSA5) initiative, as announced at the 8th Tokyo International Conference on African Development (TICAD8).

(2) Loan Terms

• The rate of interest: 2.0% per annum
• The repayment period: 30 years (including the grace period of 10 years)
• Conditions for procurement: untied

 
2.  Economic and Social Development Programme (Providing equipment for the digitization of agricultural machinery lending centers)
(Grant amount: 500 Million Yen (approx. USD 3.3Mil) )

1. Egypt is one of the world's largest wheat importing countries, relying on imports for approximately 60% of its domestic wheat consumption. The country faces an urgent need to meet its domestic food needs due to rising wheat prices caused by the unstable international situation in recent years and the effect of the influx of displaced people from neighboring countries including Sudan. This project will provide the Government of Egypt with agricultural equipment to promote the digitalization of agricultural machinery lending centers and equipment related to system construction, in order to improve the efficiency of agricultural equipment utilization and strengthen food security. Therefore, it contributes to economic and social development to Egypt through social stabilization.
2. Improvement of food security and sustainable agriculture were mentioned in TICAD 8 Tunis Declaration adopted in August 2022, as well as at the Japan-Egypt Summit in April 2023, and the implementation of this programme is expected to promote the establishment of resilient and sustainable agriculture and food systems in the Global South, including in Egypt.

 
3. Project for the Improvement of Equipment at the National Cultural Centre
(Grant amount: 180 million Yen (approx. USD 1.2Mil) )
 The National Cultural Centre was established in 1988 with grant aid from Japan and has been attracting widespread popularity in Egypt as an important facility that serves as a base for educational and cultural activities. The centre has played an important role as a symbol of bilateral relations between Egypt and Japan, but more than 35 years have passed since its construction, and the facilities and equipment in the main hall, where international-level performances have been held are aging, and refurbishment of these facilities and equipment has become an urgent issue. This project aims to increase opportunities for a wide range of art appreciation, improve the quality of cultural and educational activities carried out at the facility, and increase user satisfaction by renewing and refurbishment of the hall's seats and floor carpets, thereby contributing to the development of Egyptian human resources through culture and art, and to the promotion of culture in the Middle East and North Africa.