ITFC agrees $1b to bankroll Egypt energy, food imports

CAIRO – The Egyptian government signed an agreement Sunday with the Islamic Development Bank (IDB) that will provide $1 billion to finance energy and food imports, the government said in a statement.

It said the agreement with the International Islamic Trade Finance Corporation (ITFC), part of the IDB, was signed in the Egyptian capital by Waleed Abdul Mohsen Al-Wohaib, chief executive of the institution, and Egypt’s international cooperation minister, Faiza Abu El-Naga. "Dr. Waleed Al-Wohaib said the institution is keen to support the Egyptian economy by offering Islamic finance aimed at supplying strategic commodities such as wheat and petrol," the statement said. The finance was part of a previously announced agreement to provide Egypt with $2.5 billion, it said. Egypt’s outgoing army-backed government has struggled to secure aid promised by foreign donors after a popular uprising ousted president Hosni Mubarak last year and the country now risks a balance of payments crisis. Trade sources said this month that the government had struggled to obtain bank payments for its fuel purchases.

They said this had led to shipping delays that may have disrupted supplies for transport, industry and farming. The government denied any problems with energy supplies.

A new government being formed by President Mohamed Mursi, who took office Saturday after winning Egypt’s first credible leadership election, will want to move fast to secure funding to plug a gap left by an exodus of foreign investors and tourists.

The biggest chunk of aid so far was a $1 billion, eight-year loan from Saudi Arabia in May but state borrowing costs are at historic highs and a pile of short-term debt raised since the uprising comes due in the second half of 2012. – Reuters