Dr. Rania Al-Mashat Signs a $230 Million Development Financing Agreement with Japan for Budget Support

On the Occasion of Her Visit to Japan for the 70th Anniversary of Development Cooperation:

 

Dr. Rania Al-Mashat Signs a $230 Million Development Financing Agreement with Japan for Budget Support

 Al-Mashat: Concessional financing is an efficient and cost-effective mechanism to reduce the financing gap.

 Japanese financing is part of negotiations with international partners to increase fiscal space and support the budget.

  Budget support financing is linked to structural reforms empowering the private sector and improving the business environment.

 Commitment to expanding financing mechanisms from Japan for the private sector.

  Two grants signed worth $4.3 million to develop the Opera House and expand agricultural mechanization.

H.E. Dr. Rania Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, and Mr. Fuji Hisayuki, Japan’s State Minister for Foreign Affairs, signed three agreements between Egypt and Japan. These agreements, in the form of grants and concessional development financing worth $234 million, are aimed at supporting Egypt’s budget, promoting private sector development, improving livelihoods for small-scale farmers, and renewing the Egyptian Opera House. This took place during the celebration of 70 years of Egypt-Japan development cooperation.

The agreements include financing for development policy to support private sector development, economic diversification, and budget support, worth 35 billion Japanese yen (approximately $230 million USD), in line with national efforts to alleviate global economic pressures on the Egyptian economy and support structural reforms by encouraging private sector investments, enhancing the business climate, promoting competition, and fostering economic diversity and the green transition.

Al-Mashat explained that the Development Policy Program aims to support Egypt's general budget, strengthen structural reform efforts, and stimulate private sector investments by encouraging competitiveness, improving the business environment, and promoting the green transition. She emphasized that concessional development financing is one of the most efficient and cost-effective mechanisms for reducing the financing gap, enabling the state to meet its needs and address global and regional economic tensions.

She noted that the policy development program with Japan is part of an integrated framework of negotiations with international partners over financing packages to increase fiscal space. It is a critical pillar of the partnership with Japan, as it aligns with the national structural reform program, overseen by the Ministry in coordination with relevant entities and ministries. This program includes a matrix of reforms designed to improve Egypt’s business environment.

She highlighted that within the framework of the agreement with Japan, the government has implemented various structural reforms to stimulate the private sector and improve the business climate. These reforms include the establishment of the Supreme Council for Investment, the elimination of tax and fee exemptions for state-owned enterprises engaged in investment activities, and the expansion of land allocated for renewable energy projects, among other measures.

Grants worth $4.3 million

Moreover, Al-Mashat signed a grant for the renovation of the Cairo Opera House, worth 180 million Japanese yen (equivalent to $1.17 million USD), aimed at improving the infrastructure of the National Cultural Center. This will be achieved through the development of equipment and services in collaboration with the Japan International Cooperation Agency (JICA).

Additionally, a grant under the Economic and Social Development Program, worth 500 million Japanese yen (equivalent to $2.3 million USD), was signed to benefit the Ministry of Agriculture. The goal is to expand agricultural mechanization technology at low costs and reduce operational expenses, contributing to increased agricultural production, expanding cultivated land, and improving the living standards of farmers, especially low-income and vulnerable groups.

Dr. Al-Mashat stated that today's developments represent an exceptional phase in the history of Egypt-Japan relations. These efforts reinforce mutual cooperation and affirm the strength of the partnership, which has spanned more than seven decades since its inception in 1954.

She elaborated that this relationship has been strengthened through a remarkable journey of cooperation based on mutual respect, shared vision, and a steadfast commitment to achieving sustainable development. Over these seven decades, the total value of grants and technical assistance provided by Japan to Egypt has reached approximately $2.4 billion, alongside development financing estimated at $7.2 billion, underscoring the depth of the relationship and its role in supporting Egypt's development trajectory.

Al-Mashat affirmed that the Ministry of Planning, Economic Development, and International Cooperation is making every effort to solidify this strategic partnership through the annual Egypt-Japan Policy Dialogue, reinforcing the commitment to strengthening these ties. She expressed her anticipation of soon announcing the "Egypt-Japan Cooperation Strategy," which has been agreed upon by both parties. She emphasized that today's achievements reflect tangible progress in the Egypt-Japan cooperation portfolio, which harmonizes Japan's development financing mechanisms with Egypt's national priorities, as outlined in Egypt's Vision 2030 and the government’s work program (2024-2027).

Dr. Al-Mashat extended her gratitude to the Japanese government, represented by the Ministry of Foreign Affairs, and to JICA, as well as all relevant parties for their efforts in realizing these agreements.