A preliminary deal between Egypt and the IMF will see the government open up $2 billion in new projects to private investment as Cairo moves to accelerate a stalled privatization program.
A senior official at the Ministry of Finance, speaking to Al Manassa on condition of anonymity, said the agreement was reached during the IMF mission's visit to Cairo from Dec. 1–12. The mission reviewed the fifth and sixth tranches of Egypt’s $8 billion extended loan package, previously stalled over delays in the government's privatization program.
Central to the deal are two desalination projects worth $900 million, one in the Suez Canal Economic Zone, the other in southern Alamein, scheduled for launch in January. These are the first in a pipeline of offerings aimed at accelerating the state’s withdrawal from direct economic activity.
“The goal is to reduce the fiscal burden and increase private sector involvement in the economy,” the official said, emphasizing that the shift would enable the government to reallocate public spending toward education and healthcare.
The IMF has made continued funding contingent on deeper institutional reforms. These include not only asset sales but also tightening fiscal policy, cutting the budget deficit and public debt, enhancing exchange rate flexibility, and making the investment climate more favorable for private capital.
Egyptian officials presented a detailed roadmap for privatization, including a timeline for offering state-owned companies across multiple sectors. The aim, they claimed, is to boost private sector participation while maintaining regulatory oversight.
The IMF has emphasized the urgency of asset sales and securing foreign currency inflows, which are critical to stabilizing Egypt’s macroeconomic outlook amid soaring external debt, a weakened pound, and skyrocketing import costs.
The findings of the IMF’s latest reviews are expected to be submitted to its Executive Board in the coming weeks. If approved, Egypt will receive $2.4 billion—covering the long-delayed fifth and sixth tranches—as well as $274 million under the Resilience and Sustainability Facility, part of a broader $1.3 billion allocation aimed at climate-related projects.
According to the source, Egypt’s acceptance of the IMF’s conditions is seen as crucial to unlocking these funds, now deemed urgent as the country battles an acute financial crisis.
