Supporting Investment in the Mediterranean Region Egypt Investment

Supporting Investment in the Mediterranean Region Egypt Investment Forum 3 -4 February 2018 European Investment Bank

The EIB: the EU Bank ‣ Shareholders: 28 EU Member States ‣ Long-standing partner of the Mediterranean Region covering more than 35 years. Investing in Europe’s Neighbourhoods’ growth 2

The EIB at a glance Provides long-term funding to finance projects; Non-profit maximizing institution. 901 projects were approved in 2017, in over 160 countries; EIB Group financing amounting to EUR 78 bn in 2017 European Investment Bank 3

EIB activity outside the European Union In the framework of the Economic Resilience Initiative (ERI) EUR 13 bn investments for the Southern Neighbourhood region from 2014 till 2020. In the Mediterranean Region the EIB Supports: Upgrading of socio-economic infrastructure in sectors such as transports, energy, water, environment, IT, health and education; Development of the local private sector, (including Corporates and SMEs) by promoting technology transfers, trade and encouraging FDI; Environmental sustainability and addressing the effects of climate change (renewable energy, energy efficiency and climate adaptation projects). European Investment Bank 4

Southern Neighbours are key partners Total signatures from 2007 to date – EUR 16. 5 bn of which EUR 1. 9 bn in 2017 Loans signed from 2007 to date (breakdown per main sector ) Loans signed from 2007 to date (breakdown per country %) Algeria 3% Manufacture 3% Tunisia 23% Egypt 27% Syrian Arab Republic 4% Social infrastructure 5% RE & EE 5% Sustainable urban/interurban transport 5% Risk capital/equity 1% Telecommuni cations 1% Energy 27% Industry 7% GAZA-WEST BANK Israel 0% Morocco 25% 7% Jordan Lebanon 4% Water and wastewater 8% 7% European Investment Bank Transport 16% SMEs and Mid. Caps access to finance 21% 5

The EIB toolkit for the Neighborhood Lending • Loans – direct (over EUR 25 m) and intermediated (for smaller projects of SMEs and/or Mid-Caps via local financial intermediaries) • Guarantees • Subordinated loans • Quasi-equity Blending • Investment Grants • Interest Rate Subsidies • Financial Instruments • Technical Assistance Grants Advising • To support project preparation, evaluation and implementation • An essential and integral component of many projects • Including higher risk projects (e. g. Innov. Fin for innovation) • Equity 6

Where do we stand in Egypt Signatures EUR M Exposure 4. 7 bn EUR 870 894 Pipeline 2 bn EUR 472 352 187 2013 2014 2015 2016 2017 * at 31 st December 2017 European Investment Bank 7

A need to Transform the Economy Large scale creation of quality jobs is required with a shift of labour towards more productive industries But Private sector in the MED region lack dynamism Entry and exit sector are low Firm are often disconnected from the financial sector Only few industries are integrated in global value chains Transformation is required European Investment Bank 8

How to address this Challenge? I. Allowing the private sector to operate better Macroeconomic stability Removal of distortions Improving the business environment Also II. Need for a focused job creation strategy The government needs to identify a number of sectors with high employment potential and remove barriers selectively ≠ Protect domestic incumbents European Investment Bank 9

How can IFIs/DFIs contribute? Act as catalysts to Reinforce financial infrastructure through loans, investments and support to policy reform Help access to finance in specific subsectors Partial portfolio guarantees Advisory to MSMEs or financed Institutions Incubators and dedicated funds Let’s not forget Finance FDIs… and help create local value chain Support economic infrastructure European Investment Bank 10

Thank You! ! ﺷﻜﺮﺍ European Investment Bank 11