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Agreements Procedures

The Ministry of International Cooperation (MOIC) concludes loan and grant agreements with Egypt’s development partners for financing development projects of priority, which render direct services to its citizens.

1- Preliminary Steps

  • The development project requiring funding is enlisted by the beneficiary in the five year economic social development plan and is given a code number and priority number.
  • The beneficiary submits a request to MOIC concerning the required financing, which includes a code No., the total project cost and the required foreign aid, to which are attached a feasibility study and a declaration of the allocation of the required local component.

2- Criteria for receiving Funds from Egypt’s Development Partners

  • MOIC reviews the financing request, verifies that it is enlisted in the five year plan, reviews the feasibility study to ensure the project’s realization of benefit, return and contribution to the overall development of the State, while taking into consideration the fair distribution of financial sources over different economic and social development sectors as well as fair geographic distribution over Egypt’s governorates so as to guarantee the realization of optimum benefit for Egypt.
  • MOIC attempts, as far as practicable, to secure non-refundable grants contributing to financing nonprofit projects.
  • MOIC is concerned with the project’s ability to generate revenue in foreign currency, which in turn, secures the beneficiary’s ability to repay the loan and its accessories without any burden on the State budget.
  • The loan must include a grant component of at least 40%.
  • The borrowing ceiling must be abided by, such that the annual borrowed amounts do not exceed the repaid amounts in the same year so as to ensure safe borrowing levels.
  • Maximum facilitation terms must be secured, including the grace period, repayment period, interest rate and the overall financing parcel.
  • Minimum borrowing levels with maximum facilitated terms must be ensured for vital projects relating to basic services rendered to citizen, such as drinking water, drainage, education and health.
  • The Egyptian President’s consent on the idea of borrowing must be obtained before starting negotiations.

3- Negotiations held with the Financing Organization

  • The development partner studies the project’s technical and financial particulars by sending a mission over to Egypt for discussing the project details with the beneficiary.
  • The financing organization prepares a project assessment report and furnishes it to MOIC along with a rough copy of the grant or loan agreement for review.
  • MOIC furnishes the development partner with its own draft agreement, concerning which negotiations begin between both parties. - Upon reaching the best and most facilitated conditions for financing the project with the development partner, both parties sign the preliminary agreement (with first initials).
  • The draft agreement in Arabic and English or any other foreign language is presented to the International Agreements and Loans Review Committee of the Foreign Ministry, comprising representatives of all competent bodies, including MOIC and the beneficiary, for approving the agreement from a legal, technical and financial stance. The Committee issues its recommendations to MOIC, whether approving the draft agreement or proposing to renegotiate same.
  • The Committee’s recommendations are discussed with the financing entity for introducing necessary amendments, if any. The final agreement is signed by both parties upon authorization by the Foreign Ministry.

4- Ratification Procedures 

  • After signature of the final agreement, the Foreign Ministry is provided with original copies in both Arabic and the foreign language to be sent thereby to the Council of Ministers along with an explanatory note, the ratification (notarization) instrument, the minutes of meeting of the International Agreements Review Committee as well as the draft presidential decree approving the agreement, while reserving the ratification condition.
  • Upon the Council of Minister’s approval of the agreement, the matter is referred to the President for promulgation of a presidential decree approving the agreement.
  • Following the President’s approval, the presidential decree and the agreement are referred to the Parliament according to Article 127 of the Constitution.
  • After ratification by the Parliament, a certificate on the validity of procedures is issued by the Ministry of Justice and the State Council (in case of a loan) and the entity requesting financing and the financing body are advised of same for finalizing executive and constitutional procedures for enforcement of the agreement.