PREVIEW
Cairo is also seeking investment in green growth projects
President Abdel Fattah el Sisi is hoping to use a two-day bilateral summit with the European Union starting on 22 October to move closer to concluding a debt-swap deal with creditors before the end of 2025.
Sisi also wants to obtain more EU funding for green energy and infrastructure projects, but exchanging existing debt for lower cost alternatives is the most pressing ambition.
On the sidelines of the Annual Meetings of the International Monetary Fund and World Bank in Washington last week, Planning and International Cooperation Minister Rania al-Mashat said that ministers want to convert a portion of Egypt’s external debt into funding for green development projects, covering water management, renewable energy and climate adaptation.
The idea will be hard for the EU to oppose.
The EU-Egypt declaration of last March, which accompanied an agreement to provide €7.4 billion in grants and loans to Cairo for energy projects and migrant control, states that debt swaps ‘could enhance the fiscal space needed for essential investment’.
Since then, a series of EU leaders, including Italy’s Prime Minister Giorgia Meloni and European Commission President Ursula von der Leyen, have expressed support for green debt swaps.
During a speech in Brussels earlier in October, Ghana’s ex-president Nana Akufo-Addo had called for the EU to support ‘a programme of ‘Debt Relief for Green Investment and Resilience’ (Dispatches, 6/10/25, Akufo-Addo's ‘painful’ debt memories boost calls for new relief programme). This idea of linking debt cancellation directly to investments in climate adaptation and sustainable growth is likely to be discussed at an EU-African Union summit in Angola next month.
At June’s United Nations Financing for Development summit in Seville, hosts Spain and the World Bank launched a new Global Hub for Debt Swaps for Development, although as yet there are no targets for how much debt could be restructured in this way (AC Vol 66 No 15, High hopes, little change).
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