CDB provides $2 billion loan to strengthen the country’s foreign reserves and preserve macroeconomic stability (Linked to Project ID#52882)

On January 23, 2016, the President of China, Xi Jingping, and the Egyptian President, Abdel Fattah El-Sisi, signed a liquidity support facility agreement wherein China Development Bank agreed to provide a $1 billion loan to the Central Bank of Egypt. The loan was reportedly provided on the following terms: 11-year maturity and 3-year grace period. The loan’s interest rate is unknown. The purpose of the loan was to help the Central Bank of Egypt shore up the country’s foreign exchange reserves in the face of pressure on the Egyptian pound. According to CDB, the CDB Qingdao Branch and the CDB Cairo Representative Office organized a $900 million disbursement shortly after the loan was signed. Reporting from the Central Bank of Egypt suggests that CDB subsequently ‘upsized’ the face value of the liquidity support facility agreement from $1 billion to $2 billion. However, the precise timing of this increase in the face value of the loan is unknown. Therefore, AidData captures this $2 billion commitment in a single record for the time being.

Additional details

The Chinese project title is 央行10亿美元授信项目. In the database of Chinese loan commitments that SAIS-CARI published in July 2020 and the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020, the face value of this CDB loan is identified as $1 billion. AidData relies on the $2 billion face value that is reported by the Central Bank of Egypt for the time being. However, it is possible that the $2 billion face value of the liquidity support facility agreement that is reported by the Central Bank of Egypt reflects the receipt of an additional RMB 8 billion CDB loan (埃及央行70亿人民币授信项目) in 2018 (which is reported by multiple sources, including China’s Ministry of Commerce). This issue merits further investigation.

Number of official sources

13

Number of unofficial sources

15