[Cancelled] Africa Growing Together Fund provides $50 million loan for Sharm El-Sheikh Airport Development Project (Linked to Umbrella Project ID#36104)

On May 22, 2014, African Development Bank (AfDB) and the People's Bank of China (PBOC) signed an agreement for the Africa Growing Together Fund (AGTF) (see Umbrella Project ID#36104). The purpose of this $2 billion loan facility was to finance large development projects in Africa between 2014 and 2024. The AGTF is sponsored by the PBOC and the administered by AfDB. Then, on May 29, 2015, representatives of the Africa Growing Together Fund (AGTF) and the Government of Egypt signed a $50 million loan agreement for the Sharm El-Sheikh Airport Development Project. The borrowing terms of these loans are follows: an 20-year maturity, an 5-year grace period, an interest rate of LIBOR plus a 0.60% margin. The AfDB also issued an $90 million loan for the same project on the same borrowing terms. The proceeds of the loans were to be on-lent by the Government of Egypt to Egyptian Airports Company (EAC). This project consisted of the development of a new terminal building, a new runway, a new control tower and associated airfield, ancillary and electrical works, within the current boundaries of Sharm El-Sheikh Airport in Egypt. It sought to increase capacity of the airport by an additional 10 million passengers per year (mpax) and 34 operations/hour, giving a total capacity of 18 mpax and 68 operations/hour. The project was to be implemented over 44 months, and it was estimated to cost around $671.3 million (excluding tax). However, in June 2016, the Government of Egypt cancelled the AGTF and AfDB loan agreements and shelved plans to expand the Sharm el-Sheikh airport. A source from Egypt’s Ministry of International Cooperation said that it decided to cancel the loans and instead look at funding for other youth-led schemes and slum redevelopment, which it deemed more urgent amid declining tourist numbers to the Red Sea resort.

Additional details

The all-in interest rate (1.017%) was calculated by adding an 0.60%% margin to the average 6-month LIBOR rate in May 2015 (0.417%). 2. AfDB project identification number is P-EG-DA0-001. 3. As of July 2021, the status of this project was designated by the AfDB as cancelled.

Number of official sources

5

Number of total sources

6