Project Summary

Project General Description

The proposed intervention is the third and final phase in a programmatic series of three consecutive Program Based Operations (PBO) covering the period 2015 – 2018. The Bank planned a total of USD 1.5 billion for the three-year programmatic operation. The first two phases each amounting to USD 500 million were fully disbursed in January 2016 and March 2017. The program amount for the third and final phase is USD 500 million. To ensure steady progress and sustainability of reforms, the components of Economic Governance and Energy Support Program III (EGESP III) remain the same as in EGESP I and II, though the specific prior actions differ. Consequently, EGESP III’s package of reforms is organised around three components, namely: (i) Enhancing fiscal consolidation; (ii) Ensuring sustainable energy supply; and (iii) Enhancing the business environment. The three components are complementary and mutually reinforcing in addressing structural constraints to inclusive growth and job creation.

Project Objectives

The goal of EGESP III is to support the implementation of the government’s mediumterm development agenda aimed at building a strong foundation for inclusive and self-reliant economic growth, while leveraging on the achievements of EGESP I and II (see table 2a). Consistent with this goal, EGESP III aims specifically to: (i) advance fiscal consolidation by deepening reforms that would further enhance government revenues, rationalize or improve efficiency of its expenditures (notably the wage bill) and improve fiscal transparency and management; (ii) enhance the sustainability of energy supply by deepening reforms to further improve governance in the power and gas sectors, reforming subsidies and rationalizing tariffs; and (iii) improve the business environment by deepening reforms in the areas of investment regime and facilitation, industrial licensing, competition and financial inclusion.

Beneficiaries

The beneficiaries from the program remain the same as in EGESP I-II. The direct beneficiaries are the MoF and ministries and public entities in charge of the energy sector (e.g. EEHC, EGAS, sector regulators, etc.), and the Egyptian people, particularly the most vulnerable, who will benefit from fiscal consolidation, as resultant fiscal space is directed to fund pro-poor expenditures and social services delivery.The private sector has also benefited, and will continue to benefit, from reliable and affordable electricity, improved industrial licensing and investment regimes, improved access to finance, especially by SMEs including women-owned enterprises, as well as from more transparent and efficient PFM system.

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