The European Bank for Reconstruction and Development today signed an agreement with QNB Bank Egypt under which it will provide, for the first time in Egypt and the southern and eastern Mediterranean region, an unfunded portfolio risk sharing facility worth up to 35 million euros to support re-lending to Egyptian small and medium-sized companies.
This financial facility will cover up to 50% of the credit risk on new financing of up to 70 million euros provided by QNB Egypt to small and medium-sized enterprises in Egypt.
This facility is considered an innovative solution to support re-lending to small and medium-sized companies in Egypt and reduce the financing gap faced by this sector.
This facility is guaranteed by the European Union within the framework of the European Fund for Sustainable Development Plus (EFSD+), which supports financing and investment operations in partner countries outside Europe.
In addition, the bank will launch a pilot tool in Egypt to assess climate risks, designed specifically for QNB.
This tool, in addition to the associated technical cooperation, will help QNB expand its climate risk assessment tools to improve the assessment and monitoring of climate-related risks in the bank’s portfolio in line with international best practices.
The agreement was signed by Jurgen Rigterinck, First Vice President of the European Bank for Reconstruction and Development, and Mohamed Badir, CEO of QNB Bank Egypt.
On this occasion, Jurgen Rigterinck said: “We are proud of our long-standing partnership with the European Union and QNB Bank Egypt. Through our cooperation together, we are committed to creating more impact and building a more sustainable economy. The signing of this pilot facility is nothing but a testament to QNB Bank’s role in adopting innovative financial instruments.” And supporting local small and medium enterprises, which is considered a vital sector in the Egyptian economy.”
In turn, Mohamed Badir said: “We are pleased to sign this agreement with the European Bank for Reconstruction and Development and the European Union, which is considered the first of its kind in Egypt. We are proud of this partnership, which represents another great step in our joint endeavors to achieve a more resilient and sustainable future.”
He continued: Signing this agreement today will enhance the significant impact that we have been able to make together in the small and medium enterprises ecosystem, and will strengthen our efforts to mitigate the effects of climate change. After signing the agreement today, the value of the cooperation portfolio between QNB Egypt and the European Bank for Reconstruction and Development will rise to about 830 million US dollars, which reflects the depth of the strategic partnership between us.”
Geert Ban Koopmann, Director General of the European Commission’s Directorate General for Neighborhood and Enlargement Negotiations, also commented: “I am pleased to support the partnership between the European Bank and QNB Bank Egypt through this innovative facility, which will have a tangible impact on small businesses in Egypt. We work by sharing risks and providing… “Access to finance enables local labor leaders to drive growth and job creation, ultimately contributing to a more resilient and sustainable economy.”
