EU, Egypt to Strengthen Relationship as Part of Investment Plan

(Bloomberg) -- The European Union is set to upgrade its relationship with Egypt to the status of a “strategic partnership,” a move that could trigger billions of euros of funding and investments for the North African country.

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European Commission President Ursula von der Leyen is scheduled to visit Cairo on Sunday with Giorgia Meloni, Kyriakos Mitsotakis and Alexander De Croo, the prime ministers of Italy, Greece and Belgium, respectively.

The bloc is weighing an aid package totaling roughly €7.4 billion ($8.1 billion) for Egypt, Bloomberg reported on Wednesday. The fund injection will be a mix of grants and loans to help the country of 105 million — seen as crucial for the Middle East’s stability — get out of its worst economic crisis in decades.

“The EU stands ready to support the Egyptian economy by providing timely support as it is facing heightened balance of payments pressures,” the two sides will say on Sunday, according to a document seen by Bloomberg. “Financing will support and accompany progress along these jointly defined priorities and objectives and will unlock the full potential of private sector investment.”

The EU aims to unlock €5 billion of private-sector investments in Egypt for industries such as green hydrogen, agriculture and water management, according to the document.

Egypt, facing dire shortages of foreign exchange, was on the brink of economic disaster until it announced a $35 billion investment from the United Arab Emirates in late February. That paved the way for a long-awaited flotation of the Egyptian currency last week and a new International Monetary Fund loan of $8 billion.

Read More: Egypt Unlocks $8 Billion IMF Loan to Ease Crisis With FX Float

Egyptian officials have said they expect the EU, World Bank, UK and Japan to sign funding deals soon.

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