China Development Bank (CDB), the largest Chinese bank for foreign investment and financing cooperation, on 17 September 2017 signed two deals to provide loans to Egypt's two major financial institutions SAIBANK and Banque Misr.
The deals were signed at a ceremony at Banque Misr headquarters in Cairo, which was attended by Chinese Ambassador to Egypt Song Aiguo and representatives from the Central Bank of Egypt.
The first deal included two loan agreements, under which the CDB will provide SAIBANK with a loan of $40 million for small and medium-sized enterprises, and a special renminbi denominated loan of 260 million yuan ($40 million) for infrastructure construction.
"The deal includes about $40 million and their Chinese equivalent amount to promote small and medium enterprises (SMEs) and create many job opportunities," SAIBANK Vice Chairman Hassan Abdel-Meguid told Xinhua ahead of the signing ceremony.
He added that it comes within the framework of Sino-Egyptian cooperation in the light of the growing friendship and partnership between the two countries.
The second deal was a memorandum of understanding (MoU) signed between CDB and Banque Misr, in which the CDB will provide the Egyptian bank with a loan in Chinese currency renminbi for the first time.
"The loan amount is still being studied. Having the loan in the Chinese local currency will help provide loans to Chinese companies that operate or want to enter the Egyptian market in their own currency, which will encourage their investment in Egypt," Banque Misr Vice Chairman Akef Abdel-Latif al-Maghraby told Xinhua after signing the MoU.
Maghraby said it's important for China to have their own currency used more outside China, noting his bank has previously signed two loan agreements with the CDB that are worth $100 million and $500 million respectively.
Maghraby described Egypt's relations with China as "very strong and historical" with their close cultures and political and economic understanding and integration.
He stressed that Egypt is an active player in the Belt and Road Initiative proposed by Chinese President Xi Jinping in 2013.
CDB Executive Vice-President Wang Yongsheng, who signed both deals with SAIBANK and Banque Misr, said the agreements marked a big step forward for the internationalization of the Chinese currency renminbi within the framework of the Belt and Road Initiative.
"It is just the beginning of a brighter future for the cooperation between China and Egypt under the framework of the Belt and Road Initiative," Wang told Xinhua.
CDB chose Egypt as the destination for its first overseas representative office established in 2009, which is also the only Chinese financial institution in Egypt.
It has also provided financial service to support various sectors in Egypt, including energy, telecommunication, banking, manufacturing, and small and medium-sized enterprises. By the end of 2016, CDB's loan outstanding in Egypt had reached more than 2 billion dollars.
At the invitation of President Xi, Egyptian President Abdel-Fattah al-Sisi took part in the summit meeting of the BRICS economic bloc grouping Brazil, Russia, India, China and South Africa, which was held in Xiamen, China, on Sept 3-5.
Meeting on the sidelines of the BRICS summit, Xi told Sisi that China is ready to advance the comprehensive strategic partnership with Egypt.
"During the BRICS summit, President Xi and President Sisi vowed to enhance partnership in various fields, including financial cooperation," Ambassador Song told Xinhua.
"So, I am happy to witness the signing of the joint financial deals today as the best example of what we can achieve through cooperation between the two countries," he added.
Source: China Daily