Arab Republic of Egypt
Third Fiscal Consolidation, Sustainable Energy and Competitiveness
Programmatic Development Policy Financing
December 5, 2017
Chair’s Summary*
The Executive Directors approved the Third Fiscal Consolidation, Sustainable Energy and Competitiveness Programmatic Development Policy Financing (DPF)(R2017-0238) to Egyptin the amount of US$1.15 billion on the payment terms and conditions set out in the President’s Memorandum.
Directors welcomed the focus on advancing fiscal consolidation, ensuring sustainable energy supply and enhancing the business environment for inclusive growth and job creation. Directors noted that these areas are core to achieving the results outlined in the World Bank Group Country Partnership Framework and the MENA strategy and recognized the contribution of the proposed operation to the World Bank Climate Change Action Plan.
Directors noted that the programmatic DPF series has been instrumental in supporting the much-needed reform agenda in Egypt after the Arab Spring. Directors welcomed the multi-sectoral approach of the Government’s reform program and broad engagement of the private sector and civil society. They noted the strong support and coordination of development partners, as demonstrated by the close alignment to the three-year Extended Fund Facility of the International Monetary Fund; the African Development Bank’s continuation of parallel development finance, with its proposal for a third budget support operation; and the United Kingdom’s IBRD guarantee of US$150 million for this operation.
Directors appreciated the bold and transformative economic and social reforms being undertaken, and encouraged the Government to maintain its commitment to fiscal consolidation, energy subsidy reforms, private sector development as well as economic diversification and inclusiveness. They recommended a stronger focus on developing a robust and well targeted social safety net system to protect the most vulnerable. They also sought commitments that the views of civil society throughout the reform process would be incorporated to rebuild the “social contract” and ensuring sustained efforts to support the participation of women.
Finally, Directors appreciated the candid assessment of risks, including social implications of energy pricing reforms and high inflation, and urged the World Bank Group to work with the authorities and other stakeholders to closely monitor and mitigate them. They welcomed the One WBG approach adopted in the DPF and encouraged continued close collaboration among the World Bank, IFC, and MIGA in renewables and enhancing competitiveness through the Maximizing Finance for Development approach.
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*This summary is not an approved record.