Minister of Planning, Economic Development & International Cooperation Announces Disbursement of €1 Billion from the EU under the Macro-Financial Assistance & Budget Support Mechanism (MFA) Following the Implementation of 16 Measures under the National Structural Reform Program

Al-Mashat: Concessional budget support financing mechanisms are a key tool for reducing short-term financing pressures, extending debt maturities, and expanding fiscal space for spending on human development programs.

 

H.E. Dr. Rania Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, announced today, Thursday, the disbursement of €1 billion in concessional development financing from the European Union under the first tranche of the second phase of the Macro-Financial Assistance and Budget Support Mechanism (MFA). This disbursement follows the announcement upgrading relations between Egypt and the European Union, signed by H.E. President Abdel Fattah El-Sisi, President of the Arab Republic of Egypt, and H.E. Ursula von der Leyen, President of the European Commission, in March 2024.

 

This financing forms part of the broader package signed in October during the first Egypt–EU Summit in Brussels, which resulted in the Memorandum of Understanding governing the second phase of the EU’s Macro-Financial Assistance and Budget Support Mechanism for Egypt, amounting to €4 billion.

 

Dr. Al-Mashat confirmed that the first tranche of the second phase is linked to the implementation of 16 structural reform measures that Egypt has already completed under the National Structural Reform Program, in coordination with relevant entities, including the Central Bank of Egypt, and the Ministries of Finance; Planning, Economic Development and International Cooperation; Investment and Foreign Trade; Electricity and Renewable Energy; Water Resources and Irrigation; Environment; and Industry.

 

She explained that these reforms contribute to strengthening macroeconomic stability through improved public financial management, development of medium-term budgetary frameworks, enhanced financial risk management, and governance of public investment. They also support competitiveness and the business environment by improving industrial land allocation mechanisms and streamlining investment licensing procedures. In addition, the reforms advance the green transition through strengthening sustainable water resource management, developing waste-to-energy policies, improving energy efficiency, and protecting the natural capital of the Red Sea—thereby supporting the achievement of sustainable economic development.

 

Dr. Al-Mashat added that, with this tranche, Egypt has implemented a total of 38 reform measures under the National Structural Reform Program within the framework of the strategic partnership with the European Union. This includes 22 measures under the first phase, disbursed in January 2025 for €1 billion, and 16 measures under the tranche disbursed this week. She noted that €3 billion remain, to be disbursed in two tranches during 2026.

 

She further clarified that this tranche comes as part of the continued implementation of the Macro-Financial Assistance and Budget Support Mechanism, which totals €5 billion. Egypt received the first phase of €1 billion in January 2025, while the second phase consists of three tranches—the first tranche of €1 billion, disbursed today, and the second and third tranches scheduled for disbursement during 2026. This reflects ongoing efforts to secure concessional and lower-cost financing alternatives compared to international markets, in order to support the state budget and expand fiscal space for spending on development programs and projects.

 

Dr. Al-Mashat emphasized that this development reflects the depth and strength of Egypt–EU relations, which are witnessing strong momentum with the support of the political leadership. She noted that the Macro-Financial Assistance and Budget Support Mechanism is part of broader government efforts to implement the National Structural Reform Program, aimed at consolidating macroeconomic stability, improving the business and investment climate, and accelerating the transition toward a green economy.

structural reforms - MFA