State-owned Egyptian lender Banque Misr has secured a series of large financing packages from Chinese banks.
The Chinese Development Bank (CDB) has agreed to lend US$500mn with an eight-year tenor, which will be used to “finance strategic projects” in Egypt. It follows a five-year loan from CDB last year which was worth US$100mn.
In addition to this, Banque Misr has signed a US$100mn loan agreement with the Industrial and Commercial Bank of China (ICBC), which will be used to fund a Huawei-led project in Egypt.
Tech giant Huawei has been actively seeking to grow its market in Egypt. It had aimed to own 30% of the consumer mobile market in the country by the end of last year and sells more than 10 million mobile devices in Egypt each year.
The ICBC loan was part of a larger strategic agreement involving China Exim and Sinosure, the Chinese export credit agency and insurer. This memorandum will see US$500mn in Egyptian projects guaranteed by the Chinese government. The Huawei project will be the first.
The project will result in Huawei operating a smart city, as outlined by the company’s Egypt CEO Yang Tao, who told Egyptian media: “Huawei is expanding its participation this year, which will witness the sharing of ICT solutions to build broadband networks, excellent user experience, agile innovation, and showcasing its full range of LTE services, smart devices, and cloud data centre. The company will also mainly focus on demonstrating its smart city solutions for sensing, analysing, and integrating key information of a city’s core operating systems.”
In February, meanwhile, ICBC announced that it was to invest US$20bn in Egypt over the next decade – an indication of China’s grand strategy towards the Saharan nation. Some of the other areas to be financed include a phosphate complex and a coal-fired power plant near Hamarawein port.
ICBC is the world’s largest bank by assets and its overseas activity is often viewed as an extension of government policy. China’s funding of work in Africa is not new, but as the government continues apace with its One Belt One Road (OBOR) infrastructure initiative, strategic locations on the African continent can expect to see further financing.