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The EU commits $82 million to greening Egyptian SMEs


Written on Tuesday, December 21st 2021 à 16:09 | Read 314 times



The EU commits $82 million to greening Egyptian SMEs
EGYPT. The European Bank for Reconstruction and Development (EBRD) announced on Tuesday 21 December 2021 the opening of a credit line of $32m (€28.3m) to Ahli United Bank in Egypt (Aube). The local bank will on-lend this sum in the form of loans to SMEs to help "improve access to finance for small businesses which remain underserved despite their crucial role in the Egyptian economy", underlines an EBRD press release.
The EBRD will thus be able to extend its support to those located in remote areas outside Greater Cairo and Alexandria.

For its part, the European Union (EU) will lend an additional $10m (€8.9m) for the value chain under its trade and competitiveness programme. A further $12m (€10.6m) will be provided in collaboration with the Green Climate Fund (GCF) for the green value chain.

Again distributed by Ahli United Bank in Egypt, a 95.7% subsidiary of Ahli United Bank, Bahrain's largest bank, the funds will be targeted at SMEs in the agribusiness, manufacturing and services, logistics and information and communication technology sectors. The loans are intended to finance investments in advanced technologies and climate change mitigation and adaptation solutions to foster green value chains.
In February 2020, the EBRD also activated the Green Climate Fund to co-finance two loans to the local commercial bank QNB Alahli for on-lending to SMEs willing to invest in climate change mitigation.

A $30m trade facility

The EBRD is also providing a €30m (€26.6m) trade facility funded by the EBRD's Trade Facilitation Programme (TFP). It will allow for the issuance of guarantees to the confirming banks to support the trade finance instruments issued by Aube. As well as cash advances to finance trade-related loans to cover pre- and post-export as well as local distribution of imported goods. This facility had already been granted to the National Bank of Egypt (NBE) in June 2020.

For Hala Sadek, CEO and board member of Aube, "the multi-purpose financing package will be aimed at further strengthening our value proposition for SMEs (...) in line with the bank's strategy and the country's economic development plan."

"This financing package will benefit an underserved segment of the economy. Together with the EU, GCF and Aube, we are contributing to greener, more inclusive and sustainable economic growth, while helping to create more jobs for the Egyptian population," comments Heike Harmgart, Managing Director of the Southern and Eastern Mediterranean Region (Semed).

Since 2012 and the start of its operations in Egypt, the EBRD has invested €8bn in 138 projects.



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