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Loan Guarantee for World Bank Lending to Egypt

15 July 2025

Proposing MP
Hamish Falconer Lab
Lincoln
Type
Written Ministerial Statement
Department
Foreign, Commonwealth and Development Office
View on Parliament.uk -->

At a Glance

Issue Summary

This statement discusses a new loan guarantee by the UK government for a $200 million World Bank loan to Egypt, aimed at easing economic pressures and supporting ongoing reforms.

Action Requested

The FCDO has presented a Departmental Minute to Parliament outlining the details of this contingent liability. The liability will be incurred only after fourteen Parliamentary Sitting Days unless there is special urgency. The guarantee supports Egypt's macroeconomic stability and structural reform efforts, aligning with an IMF programme.

Key Facts

  • The Foreign, Commonwealth and Development Office (FCDO) has taken a new liability of $200 million as a loan guarantee to the World Bank for Egypt.
  • This loan was agreed in principle under the previous government and paused during the General Election period.
  • Egypt's macroeconomic situation is delicate due to external shocks from conflicts in Russia-Ukraine, Sudan, and Israel-Gaza.
  • The International Monetary Fund (IMF) programme is conditional on economic and governance reforms, with initial steps taken such as currency devaluation and public spending caps.
  • The UK guarantee supports the second of three planned World Bank Development Policy Financing (DPF) operations over a period of up to 35 years.
  • FCDO will only pay official development assistance (ODA) if there is a default, as agreed with the World Bank.
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