Turkey pushes regional role as it reportedly prepares to complete Egyptian bailout

By bne IntelliNews April 18, 2013

bne -

Part of the AKP government's drive to make Turkey a regional leader, Ankara is set to hand Egypt the remaining half of a $2bn loan agreed last year, as the North African country struggles to get its economy back on track following the Arab Spring.

Turkey will transfer the outstanding $1bn in budget support within the next two months, Reuters reported on April 17, citing unnamed Turkish officials and banking sources. The news comes just a day after Cairo failed to agree a $4.8bn bailout from the International Monetary Fund, offering Turkey a chance to contrast its commitment to the Arab world with that of the West.

On April 13, Egypt's Shura council approved the loan deal with the Export Credit Bank of Turkey, which will see the cash piped to Egyptian investors importing Turkish capital goods and machinery, reported Ahram Online.

Under the Turkish agreement, announced last September during a visit to Ankara by Egyptian President Mohamed Morsi, the treasury handed Egypt the first $1bn. Eximbank will now supply the second tranche in the next two months, the sources said, although the interest rate on the loan has not yet been settled.

"The Egyptians are completing the deal's conditions at the moment. We expect them to get it done by the end of the month and the deal to come into effect afterwards," one of the sources said. "The deal will include capital goods and pre-determined projects. Egypt will soon have a shortlist of these projects."

The loan is likely to go down well with Turkey's giant construction companies, which work extensively in frontier and emerging markets in Central Asia, Africa and the Middle East. Exporters could also benefit. Turkish trade with Egypt rose by $2bn to reach $5bn in 2012, most of that figure consisting of Turkish exports.

Cairo insisted on April 17 that its talks with the IMF have not "failed," despite having seen the Washington lenders delegation leave the country without sealing an agreement. Turkey's jump into the void follows Qatar and Libya, who agreed last week to provide $5bn in support.

Related Articles

Turkey approaches day of reckoning on economic reform

Kivanc Dundar in Istanbul -   The unexpected success of President Recep Tayyip Erdogan’s Justice and Development Party (AKP) in this month’s general election should bring much-desired political ... more

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Turkey and America seen on course for confrontation in Syria war

John Davison of Exaro - Military action by Turkey against Kurdish rebel forces in Syria raises the prospect of a direct clash with the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Notice: Undefined index: subject_id in /var/www/html/application/controllers/IndexController.php on line 296
Dismiss