Cairo, December 3, 2006 – The International
Finance Corporation, the private sector arm of the World Bank Group, today
signed its first public-private partnership advisory agreements with the
government of Egypt to support three infrastructure projects. The New Cairo
Potable Water and Wastewater projects will provide safe water and sanitation
to the growing population of New Cairo and outlying areas, while the New
School project will help the government meet the country’s growing demand
Water and sanitation services are poor and require new investment both
in Cairo and the rest of the country. According to this year’s Global
Human Development Report on Water published by the United Nations Development
Program, progress in water and sanitation requires innovative strategies
for long-term financing. Investment in water and sanitation is vitally
important for New Cairo, which is being developed to ease overcrowding
in the capital and is projected to grow from the current 350,000 residents
to 2 million by 2020. The project will also provide a model for other
projects in the water sector.
The schools project addresses the country’s shortage of schools. The government
estimates that more new primary and secondary schools are needed to meet
continuing population growth and current shortages in facilities. While
IFC will help the government implement the New Schools Public-Private Partnership
project, to include the building and management of 300 new school facilities,
the government will maintain responsibility for teaching and other core
public services. The aim of the project is to enhance cost-effectiveness
and quality of school infrastructure and maintenance.
“Public-private partnerships are a business model that helps increase
private sector investment in public infrastructure to meet the needs of
a growing economy and improve services, especially for people who need
them most,” said Lars Thunell, IFC’s Executive Vice President.
The government has appointed IFC as its transaction advisor to assist in
implementation of its public-private partnership pilots and to help attract
private investment for the financing, design and construction, and operation
of these pioneering projects.
“As a private sector development institution and a member of the World
Bank Group, IFC has a unique capacity to structure private participation
in infrastructure projects in a way that balances commercial viability
with the public good,” said Thunell.
Thunell signed the advisory agreement during his first visit to Egypt and
the region since joining IFC in January 2006.
The visit highlights IFC’s continuing commitment to its well-established
partnership with Egypt as well as to private sector development, poverty
reduction, and employment creation throughout the Middle East and North
Africa. In fiscal year 2006, IFC committed in Egypt $81 million to eight
projects, up from $44 million in the previous fiscal year.
Thunell’s agenda included meetings with government officials as well as
consultations with representatives from the local private sector and civil
society. During his visit, he was accompanied by Michael Essex, IFC’s
Director for the Middle East and North Africa region.
The International Finance Corporation, the private sector arm of the World
Bank Group, is the largest multilateral provider of financing for private
enterprise in developing countries. IFC finances private sector investments,
mobilizes capital in international financial markets, facilitates trade,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to businesses and governments. From its
founding in 1956 through FY06, IFC has committed more than $56 billion
of its own funds for private sector investments in the developing world
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. With the support of funding from donors, it
has also provided more than $1 billion in technical assistance and advisory
services. For more information, visit www.ifc.org.
IFC’s PEP-MENA is a multidonor facility for technical assistance that
supports private sector development across the Middle East and North Africa
region. The facility was launched in October 2004 as part of the G8 Broader
Middle East initiative. PEP-MENA focuses on improving the business enabling
environment, strengthening financial markets, supporting SME development,
and promoting privatizations and public-private partnerships. From its
inception through FY06, PEP-MENA has committed more than $20 million in
technical assistance and advisory services projects. Its activities are
funded jointly by IFC and the following donors: Canada, France, the Islamic
Development Bank, Japan, Kuwait, the Netherlands, the United Kingdom, and
the United States.