The European Bank for Reconstruction and Development (EBRD) is partnering with QNB Alahli, one of Egypt’s largest commercial banks, to support small and medium-sized enterprises (SMEs) and energy efficiency in Egypt with a US$ 140 million financial package.
QNB Alahli is one of the EBRD’s largest clients in the financial sector, with a partnership totalling US$ 370 million dedicated to supporting SMEs, trade and the green economy.
In 2015 the EBRD provided a US$ 100 million SME credit line and a US$ 40 million trade facility (subsequently increased to US$ 150 million) to QNB Alahli under the EBRD’s Trade Facilitation Programme (TFP).
The current package includes a loan of up to US$ 100 million for on-lending to SMEs and a credit line of up to US$ 40 million for energy efficiency investments which consists of US$ 20 million committed by EBRD and US$ 20 million expected to be co-financed by the European Investment Bank (EIB) and supported by a US$ 5.8 million grant provided by the European Union Neighbourhood Investment Facility (EU NIF).
With this loan the EBRD is continuing its emphasis on the private sector in Egypt by providing financing for small businesses, which are a crucial part of the country’s economy. For many of them, access to finance remains an obstacle that holds them back from fulfilling their strong potential to generate growth and provide jobs.
The SME facility will be accompanied by technical cooperation (TC) to strengthen QNB Alahli’s skills related to SME lending. These TC activities will be supported by the EBRD’s SEMED Multi-Donor Account* and the SEMED Cooperation Funds Account.
The energy efficiency loan comes under an EBRD-led framework dedicated to financing energy efficiency and small-scale renewable energy investments. QNB Alahli will on-lend to the private sector with the goal of contributing to the expansion of sustainable energy in Egypt.
Comprehensive technical assistance funded by the EU NIF will provide support to QNB Alahli in the design of business development tools and the successful implementation of the energy-efficiency and small-scale renewable energy facility. It will also allow clients of QNB Alahli to receive support for project implementation as well as incentives, encouraging them to make sustainable energy investments.
“It gives us a great pleasure to cooperate with the EBRD in these remarkable transactions that are in line with our ambitions in supporting Egypt’s business and social community, its economic development – with particular emphasis on development of the SME segment – and Egypt’s international trade, as well as the promotion of the green economy,” said Mohamed El Dib, Chairman and Managing Director of QNB Alahli. “We are looking forward to further strengthening this partnership to meet our mutual objectives and for the benefit of Egypt’s economic, social and environmental well-being,” he added.
Hildegard Gacek, EBRD Managing Director for the southern and eastern Mediterranean (SEMED) region, said: “We are very happy to partner again with QNB Alahli to further support the private sector in Egypt, contributing to increasing SME finance. In addition, we are very pleased that the financial package will improve Egypt’s energy security through better energy efficiency in the corporate sector and promoting the use of renewable energy.”
“The European Union has provided a €23 million grant through the SEMED Sustainable Energy Financing Facility to help dismantle the numerous barriers that face the private sector and are preventing financial institutions, strategic investors and project managers from operating actively and efficiently in financing sustainable energy projects,” said Diego Escalona Paturel, Head of Cooperation at the EU Delegation to Egypt.
The EBRD has invested close to €2 billion in Egypt through 36 projects since the start of its activities in the country at the end of 2012.
The Bank’s areas of investment there include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services and contributions to the upgrade of transport services.