WASHINGTON, September 29, 2016 – A new $500 million World Bank loan will help create jobs in Upper Egypt by enhancing the business climate and improving infrastructure and the delivery of services. The Upper Egypt Local Development Program, approved by the World Bank Group’s Board of Directors today, will focus on two lagging regions, Qena and Sohag, which are amongst the poorest in the country but have a large unrealized growth potential.
This Program is part of the World Bank Group’s Country Partnership Framework (CPF) for 2015–19. The CPF provides total Bank Group support of about $8 billion during this period for supporting vital sectors of the economy in order to reduce poverty and boost shared prosperity.
The operation, which uses the Program for Results financing instrument to disburse funds directly against benchmarked milestones, will support the Government’s lagging region development program. Sub-national governments in Qena and Sohag will be empowered to deliver better infrastructure and services for economic development, job creation, and social wellbeing. Private sector coordination and investment, as well as local governance, will be improved, and a participatory approach that engages citizens at all levels will be followed.
“We are pleased to support the government’s broader efforts in developing the lagging regions of Egypt. This operation is a key part of the World Bank’s strategic focus in Egypt to promote jobs, address spatial inequality, and improve governance in service delivery.” said Asad Alam, World Bank Country Director for Egypt, Yemen and Djibouti.
Upper Egypt, which is composed of ten governorates, is home to about 38% of Egypt’s population and 67% of its poor. About 41.5% of the poorest people are concentrated in the rural part of that region. Upper Egypt falls behind the rest of the country in terms of economic growth, employment generation, connectivity, and access to quality services. The landlocked governorates are relatively distant from the country’s primary ports and markets, which has led the Government to seek Bank global expertise and financing to support Egypt’s vision for developing the lagging regions and spurring growth.
The first part of the program will improve: government to business services; competitiveness of economic sectors with unrealized potential; and industrial zone management and services for the existing six industrial zones. “The program will focus on facilitating and promoting private sector development in agribusiness, service, and industrial sectors with growth potential. The emphasis will be on private sector dialogue, participation, and investment to create sustainable jobs and growth,” said Najy Benhassine, World Bank Group Manager for Trade and Competitiveness in MENA.
The second part of the program will support the introduction of a performance-based grant system and increase the governorates’ budget and decision making authority. “The program is in particular aiming to address the most critical institutional development constraints at the local level by providing financial incentives for improved local governance enhanced services to the citizens,” said Ayat Soliman, World Bank Manager for Urban and Social Development, and Disaster Risk Management in MENA.
The World Bank finances programs and projects to reduce poverty and boost shared prosperity for the people of Egypt through investments in key sectors including social safety nets, energy, transport, water and sanitation, agriculture and irrigation, social housing, primary health care, as well as supporting employment-intensive projects and financing for micro- and small enterprises. The current portfolio of the World Bank in Egypt includes 25 projects for a total commitment of about $7.5 billion.