Egypt will receive an extra $300 million as part of a World Bank development financing package to help it confront fallout from the Iran war, Stephane Guimbert, the World Bank's division director for Egypt, Yemen, and Djibouti, told reporters on Saturday.
The package, consisting of $800 million from the World Bank and a $200 million British guarantee, is to support private sector–led job creation, macroeconomic stability, and the green transition. The bank's board approved it on Friday.
The bank's share was increased from $500 million due to "the uncertainty in the region and the shock facing Egypt, like other countries, because of the war in Iran," Reuters quoted him as saying.
The financing is on terms unavailable in commercial markets — at around 6% interest, with a maturity of 30 years and a grace period before repayments begin, Guimbert said.
The operation is the second in a three-part program. The first was approved in June 2024; a third is planned for next year.
Other lenders, including the Asian Infrastructure Investment Bank, are expected to provide complementary parallel financing.
Private investment in Egypt has risen to around 6% of GDP from roughly 4%, Guimbert said, but noted this remained far below peer economies where private investment often exceeds 20% of GDP. The bank is also advising Egypt on how to boost foreign direct investment.
Egypt has the potential to achieve 6% annual medium-term growth if macroeconomic stability and structural reforms are maintained, he added. At that pace, Egypt could generate roughly 2 million jobs annually compared with around 600,000 currently.
On social protection, Guimbert said Egypt's Takaful and Karama cash transfers offered more targeted support to poor families than its large-scale bread subsidy program. "In times of crisis, you want to lean heavily on Takaful and Karama," he said.
