Egypt has received notice from the IMF that a meeting will be held with the Executive Board to approve the fifth and sixth reviews of the IMF’s Extended Fund Facility with Egypt in late February, according to a source familiar with the IMF loan file at the Ministry of Finance who spoke to Al Manassa.
The government expects tp receive the two tranches, totaling $2.4 billion, in the first week of March, or by mid-month at the latest, in addition to $274 million under the Resilience and Sustainability Facility, the source added.
Mohamed Maait, a member of the IMF Executive Board and representative of the Arab group and the Maldives, had expected in December that board meetings would be set for late January, citing delays to the year-end holiday in the US and financial institutions, but no official statements have been issued so far setting a meeting date.
The Finance Ministry source, who requested anonymity, attributed the delay in approving the two reviews to failing to complete some targets under the government IPO program, and the slow pace of structural reforms, especially those related to the role of the state and the privatization program.
An IMF mission visited Cairo in early December to discuss the combined reviews. The fund had postponed the fifth disbursement in July and decided to merge it with the sixth review, against the backdrop of the government’s slow implementation of its program to exit public company ownership in favor of the private sector.
At the time, the IMF said that the Egyptian economy was showing signs of “robust growth” and that balance of payments had “improved markedly,” but it also recommended shifting toward a more sustainable economic model by accelerating reforms that give the private sector space and opportunity to grow and prosper.
The government source said the new deputy prime minister, Hussein Eissa, will oversee the IMF cooperation file in the coming period, in coordination with the finance minister and members of the economic group.
The government intends to resume implementing the IPO program before the end of this month, after a period of suspension, the source said, adding that March is expected to see the offering of the Gabal El-Zeit station, alongside the Wataniya and Safi companies.
The source said negotiations with the Emirati firm Alcazar Energy are at an advanced stage over the sale of the 580-megawatt Gabal El-Zeit station, moving an announcement of the deal’s details closer.
The Cabinet approved in December continuing procedures to offer wind power stations in the Gabal El-Zeit area, which belong to the New and Renewable Energy Authority, as part of the IPO program, without specifying whether the offering would be through an outright sale or usufruct.
The proposed Gabal El-Zeit deal sparked wide controversy in 2024, with critics accusing the government of giving up a major project at a price they said did not reflect what was spent to build it. The Ministry of Planning denied the allegations in an official statement, saying the offering was under a 25-year usufruct arrangement, after which the station and the project land would return to the state.
The government, according to the source, will begin taking concrete steps to exit some economic and investment activities and expand space for greater private-sector participation in development, in line with understandings reached with the IMF mission during the last two reviews.
The source also noted that the file of merging economic authorities will see serious moves led by the deputy prime minister, including preparations to merge some authorities and abolish others, subject them to oversight, and bring them into the state budget, while setting a ceiling on their investments.
The Cabinet announced in April that the IMF had disbursed $1.2 billion to Egypt, representing the tranche due under the fourth review of a total $8 billion loan under the program signed in 2022.
The program faced difficulties in implementation at the outset that led to postponing the first and second reviews, before the pace of implementation accelerated from March 2024 following the correction of the official exchange rate of the dollar and Egypt’s receipt of a large tranche of Emirati investments. The loan’s value was also raised from $3 billion to $8 billion, amid a decline in Suez Canal revenues against the backdrop of the war on Gaza.
