The International Finance Corporation (IFC) has joined forces with the Egyptian government to boost the private sector participation in the economy – helping to increase competitiveness, create jobs, and improve living standards for Egyptians.
IFC was appointed on Sunday as the strategic advisor for the government’s Asset Monetization Program, which will focus on harnessing private capital and know-how to manage state-owned assets. The programme is part of the government’s State Ownership Policy (SOP), a new framework rolled out in December 2022 aiming to empower the country’s private sector across sectors to spur economic growth.
This is the first agreement within the World Bank Group Egypt Country Partnership Framework, jointly developed with the Government of Egypt and launched in March 2023.
As per the Transaction Advisory Services Agreement (TASA) signed in the presence of Prime Minister of Egypt Mostafa Madbouly, the IFC will provide the government with technical assistance and advisory support to develop a strategy and implementation plan, help structure and prepare assets for sale – including improving corporate governance – and ultimately implement selected approved transactions.
Madbouly said: “The IFC is uniquely placed to play this role given its neutrality, strong reputation, broad global experience in privatization transactions, IPOs, trade sales and PPP tenders; multi-sectoral experience, and deep ties with strategic and financial investors focused on Egypt. Through the new agreement signed, the IFC will work in close coordination with the Egyptian cabinet’s Asset Monetization Unit to operationalize and implement the privatization strategy and harness private capital. The agreement will structure and prepare assets for sale – including improving corporate governance – and ultimately the implementation of selected approved transactions in the second phase of the program.”
“IFC has been a key partner of Egypt for several decades,” said Makhtar Diop, IFC Managing Director. “Our appointment as strategic advisor to support the sale and monetization of state assets will further unlock the potential of the private sector to build a sustainable, resilient, and inclusive economy for Egypt.”
Minister of International Cooperation and Egypt’s Governor at the World Bank Rania Al-Mashat said: “The Transaction Advisory Services Agreement between Egypt and the IFC expands the partnership and is the first operation to be signed under the recently launched 2023-2027 Country Partnership Framework with the World Bank Group, specifically supporting the government’s SOE reform agenda and harnessing private capital. As the Government’s strategic advisor for the Asset Monetization Programme, IFC will provide advisory support and technical assistance to identify a privatization model for each SOE, acknowledging the potential target investors, and defining the sale process for each SOE under the program.”
“Monetization of state assets is one of the most critical requirements to Egypt’s economic development,” said Hassan Abdalla, Governor of the Central Bank of Egypt. “The Central Bank of Egypt is proud to contribute to this multi-stakeholder effort that signals to the world – clearly – that Egypt is open for business.”
In the same context, President Abdel Fattah Al-Sisi received on Sunday Managing Director of the IFC Mokhtar Diop in the presence of Minister of International Cooperation Rania Al-Mashat.
Presidential Spokesman Ahmed Fahmy stated that the meeting dealt with various aspects of relations between Egypt and the IFC as well as the Corporation’s role in supporting development priorities in Egypt, especially through the agreement to be signed between the two sides. The agreement stipulates that the IFC will provide technical and advisory support to ensure the optimal implementation of the State Ownership Policy Document.
President Al-Sisi valued the fruitful partnership and constructive cooperation between the Egyptian government and the IFC, especially in fields of infrastructure, renewable energy, manufacturing industries, and healthcare.
El-Sisi highlighted Egypt’s keenness to continue to promote structural reforms in a way that helps to enhance the role of the private sector and provide a positive climate for all investors and global financial markets.
For his part, IFC’s Managing Director praised the distinguished relations of cooperation between the two sides, expressing the corporation’s aspiration to sign an agreement to support the Egyptian IPOs programme. In addition to, provide advice on implementing the State Ownership Policy Document in accordance with the priorities and needs of the government.
Diop confirmed the clear seriousness of the Egyptian state in promoting an open business climate, and its encouragement to the IFC to increase joint programmes with private sector to stimulate its role in supporting comprehensive and sustainable development efforts, especially at this delicate time at the global level, in which many complex crises are intertwined to impose great pressures on most countries of the world.
The IFC will continue its role to support comprehensive development in Egypt, Diop concluded.