Increasing focus on Egypt will see CDC appoint country representative
CDC, the UK’s development financial institution, has today announced that it has been granted approval by the Central Bank of Egypt to provide Tier 2 capital to the Egyptian banking sector. The approval could see CDC commit as much as US$200million to local banks to help increase their support for Egypt’s ongoing economic development.
CDC is the first bilateral development finance institution to be given clearance to provide Tier 2 capital to Egypt’s banking sector. CDC is currently in discussions with a number of Egyptian banks with a view to providing funding that will support their loan book expansion, bringing new products to their MSME (micro, small & medium-sized businesses) and export-orientated customers.
CDC’s Chief Executive, Nick O’Donohoe said:
“We welcome the decision of the Egyptian Central Bank to enable CDC to lend Tier 2 capital to the country’s banks. Supporting Egypt’s banking sector is a stepping stone for CDC to support the country’s private sector, in particular small and medium sized businesses which are the bedrock of job creation and economic growth in the country. Today’s decision will allow us to play a role in building a healthy, well-capitalised banking sector in Egypt.
“CDC is committed to the country’s economic development, so I am delighted to announce that we will appoint a country representative this year as we focus on building long-term partnerships and invest more in Egypt.”
Last year CDC announced its ambition to invest up to US$4.5bn across Africa over the four years up to 2022. CDC has invested in Egypt since 2003 and sees the country as an increasingly important focus for its investment activities. Its capital currently supports 20 companies in the country that employ over 9000 people. CDC has provided over US$115 million investment to those companies.
The UK’s International Trade Secretary Dr. Liam Fox, who is on a trade mission in Cairo this week said:
“The appetite of British companies to invest in Egypt’s future is growing. Last year, we saw CDC support Benban Solar Park and this year it plans to commit millions to Egyptian banks to assist them in developing this country’s economy. These investments clearly reflect UK’s commitment to Egypt and its people.”
In late 2017, CDC provided a loan of US$97 million to the 800MW Nubian Suns solar power project as part of a larger financing package that will help Egypt reach its green energy targets and create thousands of jobs. The Nubian Suns project is part of the Benban Solar Park, which, when complete, will be the largest solar power installation in the world. In 2016, CDC committed US$15 million to the Ezdehar Egypt Mid-Cap Fund, a first-time, locally-based investment fund that provides growth finance and know-how to small and medium-sized family businesses. For more on the impact of the Ezdehar Fund go here.
CDC has significant experience in supporting financial institutions across Africa and South Asia. In recent years, CDC has backed commercial banks, microfinance institutions, non-banking financial institutions and other providers of financial services and insurance. CDC’s investments include direct equity investments in I&M Bank in Kenya and Habib Bank in Pakistan, debt capital for the pan-African Trade Development Bank and a risk-sharing agreement with Standard Chartered Bank Sierra Leone during the Ebola crisis in 2015. In 2018 CDC committed $100 million to the Cairo-based Afreximbank in the form of a risk sharing guarantee programme to promote trade across the African Continent.
Rhyddid Carter, Corporate Communications Manager
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Notes to Editors:
- CDC Group plc is the UK’s development finance institution. Wholly owned by the UK Government, it invests in Africa and South Asia with the aim of supporting economic development to create jobs. CDC Group plc has invested in Africa since its establishment in 1948. Find out more at cdcgroup.com
- CDC takes a flexible approach and provides capital in all its forms, including equity, debt, mezzanine and guarantees, to meet businesses’ needs and achieve development impact. CDC has net assets of £5.1 billion.