Egypt now banks on Japan and South Korea to boost its infrastructure after reports emerged that the country was eyeing a $575m soft loan from the two countries to finance its various projects.
Finance ministry officials say that the country will sign three concessional loan agreements to finance projects in energy and transportation.
The signing of the financial deals comes as part of Egyptian President Abdel-Fattah El-Sisi’s third tour to Asia, which started on Friday.
Sisi seems to have more interest in improving the country’s infrastructure which is on high demand since the country’s population is also on the rise.
The loans will be at interest rates of less than one percent, to be repaid over a period of 50 years, including a 10-year grace period.
Japan’s lending package includes a $155 million loan to expand Egypt’s Borg Al-Arab airport, located about 50km southwest of Alexandria, said an official from Egypt’s International Cooperation Ministry on condition of anonymity.
The package will also include $305 million to boost the capacity of three state-owned electricity distribution companies and for the construction of a 20-MW photovoltaic station in the coastal city of Hurghada on the Red Sea.
“Egypt will also negotiate with Japan preliminary financial pledges of $482 million for the ongoing construction of the Grand Egyptian Museum in Giza and $335 million for power generation projects,” said the source.
Seoul will witness the signing of the first South Korean loan to Egypt during El-Sisi’s visit, worth $115 million to finance an upgrade of the railway signaling system between the Qena and Luxor governorates in Upper Egypt.
The Egyptian government has of late obtained support from Asian and Arabic countries as it is struggling to ensure that they get to develop at a steady fast speed to meet the high demand of power and more infrastructure in the country.
