Cairo, Riyadh Expected to Sign $21.5b Soft Loan Deals

Cairo, Riyadh Expected to Sign $21.5b Soft Loan Deals

Saudi Arabia is expected to sign a $20b energy soft loan to finance Egypt’s petroleum needs for the next five years and a $1.5b loan to fund 12 development projects in its Sinai region, two Egyptian government sources told Reuters.

The petroleum financing will have an interest rate of 2% and a grace period of at least three years, the sources said.

The agreements are tabled to be signed on April 7th during a visit to Cairo by Saudi Arabia’s King Salman where he will meet Egyptian President Abdel-Fattah el-Sissi.

According to Ahram Online, Egypt will also sign the final version of additional two funding accords with Saudi Arabia. An agreement of a concessional loan worth around $120m previously approved by the Saudi Development Fund (SDF) in January is to be inked to renovate Cairo’s historical Kasr El-Aini hospital. Another $100m loan, approved by the SDF in November 2015, is to finance the expansion of the West Cairo power station to generate an additional 650 MW.

In a related news report by Reuters, the Deputy Head of the Saudi-Egyptian Business Council was quoted as saying that Saudi businessmen will further invest a total of $4b in projects including the Suez Canal, energy, medicine, and agriculture. They are believed to have already deposited 10% of that sum in Egyptian banks.

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