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The Arab Republic of Egypt

Social Development Fund (Phase II)

 

Loan No.: 346 Interest Rate: 3.0%
Beneficiary: Social Development Fund Grace Period: 7 years
Project Cost: KD 235.6 million Maturity: 25 years
Amount of Loan: KD 21.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 18/03/1998 First Installment: 7 years following the first disbursement
Date of Effectiveness: -    

 

Objectives: 

The project aims at the continuation of the positive results achieved during Phase I of the Social Development Fund project by participating in reducing poverty levels, enhancing the development process in poor communities, and mitigating the negative impacts of the economic structural reform program. Towards this end, the project aims at establishing proper implementation mechanisms for alleviating the burden on the people by providing employment opportunities for new graduates, improving living standards and environmental conditions for targeted groups, and supporting private sector participation in economic development.

Description:

The project, which is expected to be completed by the end of year 2000, consists of the following components:

  1. Enterprise Development Program: This will provide direct and indirect financial credit and technical assistance and training for new and unemployed graduates to help them establish their own feasible economic projects that will create new jobs and improve income generation.

  2. Community Development Program: This will finance projects that facilitate adequate training and equipment in the areas of handicrafts and food industries and their distribution, and finance local projects in the areas of health, education, environment and childhood. This program also includes the Productive Families Scheme, and the Mubarak Solidarity Program, which serve similar goals.

  3. Public Works Program: This will finance specific projects intended mainly to improve living conditions for targeted groups through financing labor-intensive activities such as upgrading rural roads, drinking water, sewerage systems, and rehabilitation and maintenance of public buildings and utilities. The program also covers the establishment of industry complexes and incubators to assist small and emerging industries.

  4. Employment and Retraining Program: This includes the rehabilitation and retraining of the labor force in the public sector that is affected by the economic structural reform program.

  5. Institutional Development Program: This includes enhancing local institutions' capabilities and improving their performance through providing relevant information and data, as well as supporting the organizational capabilities of the Social Development Fund itself and training its staff.

Financing:

The Arab Fund loan represents about 9% of the expected total project cost. Several Arab and international development aid agencies and many countries will provide about US $384 million for the project financing; of which Kuwait Fund for Arab Economic Development will provide about KD 15 million; the Abu Dhabi Fund for Development will provide about KD 3 million and the World Bank about US $120 million. The European Commission has provided a grant amounting to US $ 200 million, the United Nations Development Program's grant amounted to US $ 4 million; in addition to bilateral financing from other countries amounting to US $126 million. Non-governmental organizations are also expected to contribute in the amount of US $54 million. The Egyptian government will cover the remaining costs.

 

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