Saudi Arabia said Friday it had approved $430 million in project aid to Egypt and would allow Cairo to use a $750 million line of credit to import oil products. The aid, to be provided by the Saudi Fund for Development, is part of a package that Saudi Arabia announced a year ago to support the country's economy. Economists have said the country will need a minimum of $11 billion over the next year to stave off a balance of payments crisis and a potential devaluation of its currency. Saudi Arabia earlier this month transferred a separate $1.5 billion to Cairo as direct budget support. The new aid will finance three projects in Egypt worth $230 million, Ahmed Kattan, Saudi Ambassador to Egypt and its permanent representative in the Arab League, said in a statement Friday. It includes $60 million to supply drinking water to the Cairo district of Nasr City, $80 million to renew and replace irrigation pumps and $90 million to build seed storage silos. The fund will also place $200 million in revolving credit in a bank account to help Egyptian small- and medium-sized enterprises, the statement said. Another $750 million line of credit to finance Saudi exports to Egypt will be exempted from a requirement that it be used to buy non-oil products. “Egypt has been exempted from importing $750 million worth of non-oil products from Saudi Arabia ... based on the severe oil-products shortage faced by Egypt,” Kattan said in the statement. “Oil will continue being exported to Egypt in batches as soon as possible.” Saudi Arabia deposited $1 billion in Egypt's central bank on June 2 and transferred $500 million to buy Egyptian T-bonds June 4, Egyptian Finance Minister Mumtaz Al-Saeed said this week. – SG/ReutersEgyptian financial newspaper Al-Mal said Tuesday the Saudis would buy seven-year bonds carrying a coupon of 5 percent.
