Kuwait loans $60m to aid Egypt's gas network
KUWAIT CITY // In an effort to bring some relief to Egypt's overstretched treasury, the Kuwait Fund for Arab Economic Development has offered it a loan to improve its natural gas infrastructure.
The loan, worth an estimated US$60 million (Dh221.7m) - and awaiting the approval of the Egyptian government and Mohammed Morsi, the country's new president - would increase the number of homes in Cairo and Giza using Egyptian natural gas and reduce reliance on imported fuel, the Kuwait Fund's director general Abdelwahab Al Bader said last week.
The fund's offer comes amid deep economic strains in Egypt.
Foreign reserves have dropped by more than 50 per cent since April 2011, with imports of petroleum-based fuels more than doubling since 2009, from about US$2 billion annually to more than $4bn annually, according to the Central Bank. Foreign aid and dwindling foreign currency reserves, which Cairo also uses to finance food imports, were high on the agenda of Mr Morsi's recent trip to Saudi Arabia for talks with King Abdullah. Riyadh has provided $1 billion in aid since May and it has promised at least $1.7bn more.
Mr Al Bader said the fund was also prepared to discuss other aid such as job creation programmes.
In May, the fund approved an US$88m loan to Egypt to finance the construction of a 750 megawatt power plant north of Cairo.
That brought the fund's Egypt loan portfolio to US$1.6bn, the official Kuwait news agency reported. In addition, Mr Al Bader said the Kuwait Fund was planning to assist several other countries whose economies halted amid the unrest of the Arab Spring, including Oman, Bahrain, Yemen, and Morocco, in part to fulfil a pledge for stepped-up aid made by the members of the Gulf Cooperation Council at their summit in May.
As for Bahrain in particular, Mr Al Bader said the fund expected to oversee projects totalling to "about $250m a year" for the next ten years. He also indicated public housing would be a focus area.
Lack of such housing has been a main grievance of Bahraini protesters since pro-reform demonstration began last year.