New Agreement in Egypt to Settle Historical Debt Worth $1.97 Billion

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The Egyptian government announced the signing of a tripartite agreement between the Ministries of Planning and Economic Development, Finance, and Industry; to settle the historical debt owed to the National Investment Bank by the General Authority for Industrial and Mining Projects, amounting to 1.97 billion dollars (102.75 billion Egyptian pounds), which is considered one of the largest outstanding government debts.

The framework agreement stipulates the settlement of the total outstanding debt until the end of August 2026, amounting to 1.97 billion dollars (102.75 billion Egyptian pounds), with the authority being exempted from late fees amounting to about 1 billion dollars (51 billion Egyptian pounds), to alleviate the burdens on it and enable it to implement its development plans, according to a statement issued by the Egyptian Cabinet on Wednesday.

The settlement mechanism includes a cash payment covered by the Ministry of Finance, in addition to the transfer of ownership of state-owned assets to the National Investment Bank, enabling the bank to re-utilize and invest them to strengthen its financial position and restore its role as a developmental arm.

Ahmed Rostom, the Egyptian Minister of Planning and Economic Development, stated that ending the entanglements and historical debts owed to the National Investment Bank by ministries and public authorities, through innovative mechanisms such as swapping with unused assets and partial exemptions, leads to a practical and direct model of how the reduction of public sector debt reflects, and contributes to alleviating the burdens and financial pressures on struggling economic entities and reforming their financial structures.

He explained that, at the same time, these efforts contribute to strengthening the structure of the state budget by readjusting the financial position of the bank and transforming it from recording losses to achieving profits by maximizing the value of the financial and tangible assets owned by it, which reduces reliance on cash financing and frees up bank credit for the private sector, granting the state a high rating in financial flexibility and structural discipline indicators from credit rating agencies, and improving the terms and durations of sovereign financing.

He confirmed that with this settlement, the total debts that the ministry and the National Investment Bank have resolved and signed exceed 7.7 billion dollars "400 billion pounds", which are complex debts, some of which date back to the 1980s.