Egypt and the Islamic Trade Finance Corporation (ITFC) agreed to a USD 1.5 billion loan to help with food and energy security in the North African country.
Since 2008, the ITFC has approved more than USD 24 billion in funding for Egypt to finance the energy sector, contribute to food security and support small and medium-sized enterprises, ITFC CEO Adib Youssef Al Aama said at the signing ceremony.
This includes USD 8.8 billion in funding to the General Authority for Supply Commodities to support Egypt’s imports of food commodities, most notably about 12.6 million tonnes of wheat. The ITFC has also supported Egypt with foreign oil companies’ arrears that the government has committed to fully repay by the end of June.
Egypt has one of the largest bread subsidy schemes in the world, with an annual bill of more than USD 2.6 billion supporting an estimated 70 million people.
The government said it would terminate its existing subsidies regime from July and replace it with cash transfers. The loan arrives as Egypt’s economy reels from the aftershock of the war in Iran, heaping new pressure on a country that is still trying to recover from a shaky reform path under its USD 8 billion IMF programme.
The Middle East conflict, along with the trade disruptions at the Strait of Hormuz, has already put immediate pressure on the fragile economic stability of the North African country, which is still dependent on hot money inflows as a source of financing and gas imports as a major source of energy.
The agreement between Egypt and ITFC highlights the country’s ongoing reliance on external financing to stabilise its food and energy systems amid persistent economic pressures. With global commodity volatility and regional conflicts adding strain, the funding is expected to support critical imports and ease fiscal burdens. It also underscores Egypt’s broader shift toward reforming subsidies and strengthening financial resilience under international assistance frameworks.