The World Bank has revealed details of the $3b loan to the Egyptian government, which entails raising tax revenue and electricity prices, while reducing government’s wages and energy subsidies, Egypt Independent wrote. The total loan will come in three annual installments each worth $1b.
The loan is to ensure providing sustainable energy through integrating the private sector and reducing energy subsidies from 6.6% of the GDP recorded in the FY 2014-2015 to 3.3% by the FY 2016-2017. Additionally, Egypt agreed to increase the “average electricity tariff across all consumer groups” from EGP 0.226 per kWh in 2014-2015 to EGP 0.451 per kWh by 2018-2019. Further, Egypt is to expand commissioning of private companies for renewable energy projects, with a goal to raise total output from renewable energy from the current zero level to 1,500 MW by the end of 2018-2019.
The World Bank loan, agreed in December 2015, is to support the Egyptian state budget and improve country’s overall financial situation.