Egypt Seeks $3 Billion World Bank Loan to Support Budget

Egypt is in talks with the World Bank to secure a $3 billion loan to support the budget, Finance Minister Hany Kadry Dimian said on Wednesday.

The funds will be disbursed over three years and will also help ease Egypt’s dollar shortage, Dimian said in Cairo, where he was attending an economic conference.

“The advantage of this loan is that it comes with very soft terms with regards to financing and tenor, and has a grace period,” the minister said in an interview, without giving more details.

Egypt is seeking to mobilize external funding to help plug its budget deficit and bolster its foreign reserves, which have fallen to $16.3 billion in September -- enough to cover about three months of merchandise imports. The budget deficit may narrow to 11.8 percent of economic output in the fiscal year through June, according to HSBC Holdings Plc estimates.

Prime Minister Sherif Ismail said this month the government is in talks with the World Bank and the African Development Bank to try to secure $1.5 billion in loans.

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