EU releases €1B to Egypt as reform-linked financing advances structural agenda

CAIRO – 15 January 2026:  Egypt has secured €1 billion in concessional funding from the European Union, representing the first installment of the second phase of the Macro-Financial Assistance and Budget Support Mechanism (MFA). The disbursement follows Egypt’s completion of a new set of structural reforms under the National Structural Reform Program.

Minister of Planning, Economic Development and International Cooperation Rania Al-Mashat said the tranche is conditional on the implementation of 16 reform measures, carried out in coordination with core state institutions, including the Central Bank of Egypt and a number of economic ministries.

These measures build on reforms delivered during the first phase of the MFA, raising the total number of completed actions to 38 reforms to date. The MFA framework is designed to channel budget support on favorable terms, easing short-term financing pressures, lengthening debt maturities, and widening fiscal space—particularly for spending on human development and social protection.

A substantial portion of the reforms targeted macroeconomic stability and resilience, including closer coordination with the International Monetary Fund on foreign-exchange indicators, stronger domestic revenue mobilization, and deeper implementation of amendments to the Public Financial Management Law. Additional steps focused on advancing the Medium-Term Budget Framework, issuing fiscal strategy papers aligned with international standards, enhancing financial risk management, and improving public investment governance in line with OECD methodologies.

Under the competitiveness and business environment pillar, reforms addressed structural constraints facing investors. These included introducing competitive bidding for industrial land allocation, launching an electronic platform for investment licensing, and outlining plans to expand digital licensing and payment services. The measures aim to improve transparency, streamline procedures, and attract demand-driven foreign direct investment, reinforcing Egypt’s private-sector-led growth strategy.

The green transition pillar focused on sustainability and climate alignment. Key actions included new regulations to improve water resource management, approval of a revised feed-in tariff for waste-to-energy projects, and cabinet approval to designate the Red Sea marine ecosystem as a protected area, safeguarding natural capital vital to tourism and long-term economic growth.

Further reforms strengthened national energy-efficiency governance by expanding the mandate of the Energy Planning Unit, supporting Egypt’s shift toward a greener, more resilient economic model.